Financial terms

November 18, 2019

Definition of Covariance

Covariance is a statistical term used in security and portfolio evaluation, and it measures the amount which two assets move in relation to each other. A positive covariance means the assets move in t...

November 18, 2019

Definition of Coupon Rate

The coupon rate is the interest that a bond pays when it is issued. For example, a $100,000 bond with a coupon rate of 2.5% will pay $2500 per year. The interest is usually split into several payments...

November 18, 2019

Definition of Counterparty Risk

Counterparty Risk is the risk that an investor is exposed to when taking out any kind of contractual position (CDS, option, future etc.) The risk is that one (or both) of the parties involved will not...