Financial Glossary
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K
- A Nasdaq stock symbol specifying that the stock has no voting rights.
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K-Percent Rule
- A theory of macroeconomic money-supply growth first postulated by Nobel Prize-winning economist Milton Friedman. The theory states that the best way to control inflation over the long term is to have central banking authorities automatically grow the money supply by a set amount (the "k" variable) each year, regardless of the cyclical state of the economy.
The k-percent rule proposes to set the growth variable at a rate equal to the growth of real GDP each year. This would typically be in the range of 2-4%, based on averages seen in the United States.
- A theory of macroeconomic money-supply growth first postulated by Nobel Prize-winning economist Milton Friedman. The theory states that the best way to control inflation over the long term is to have central banking authorities automatically grow the money supply by a set amount (the "k" variable) each year, regardless of the cyclical state of the economy.
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K-Ratio
- A ratio that is used in the performance evaluation of an equity relative to its risk. The ratio examines the consistency of an equity's return over time. The data for the ratio is derived from a value added monthly index (VAMI), which tracks the progress of a $1,000 initial investment in the security being analyzed.
Calculated as:
- A ratio that is used in the performance evaluation of an equity relative to its risk. The ratio examines the consistency of an equity's return over time. The data for the ratio is derived from a value added monthly index (VAMI), which tracks the progress of a $1,000 initial investment in the security being analyzed.
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Kagi Chart
- A type of chart developed by the Japanese in the 1870s that uses a series of vertical lines to illustrate general levels of supply and demand for certain assets. Thick lines are drawn when the price of the underlying asset breaks above the previous high price and is interpreted as an increase in demand for the asset. Thin lines are used to represent increased supply when the price falls below the previous low.
- A type of chart developed by the Japanese in the 1870s that uses a series of vertical lines to illustrate general levels of supply and demand for certain assets. Thick lines are drawn when the price of the underlying asset breaks above the previous high price and is interpreted as an increase in demand for the asset. Thin lines are used to represent increased supply when the price falls below the previous low.
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Kaizen
- A philosophy that sees improvement in productivity as a gradual and methodical process. Kaizen is a Japanese term meaning "change for the better". The concept of Kaizen encompasses a wide range of ideas: it involves making the work environment more efficient and effective by creating a team atmosphere, improving everyday procedures, ensuring employee satisfaction and making a job more fulfilling, less tiring and safer.
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Kangaroo Bond
- A type of foreign bond that is issued in the Australian market by non-Australian firms and is denominated in Australian currency. The bond is subject to Australian laws and regulations.
Also known as a "matilda bond."
- A type of foreign bond that is issued in the Australian market by non-Australian firms and is denominated in Australian currency. The bond is subject to Australian laws and regulations.
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Kangaroos
- Slang term for Australian stocks, it refers mostly to the stocks on the All-Ordinaries Index, which is composed of around 300 of the most active Australian companies.
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Kappa
- Used in regression analysis, Kappa represents the ratio of the dollar price change in the price of an option to a 1% change in the expected price volatility.
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Katie Couric Clause
- A slang term for a controversial proposed clause from a Securities and Exchange Commission (SEC) rule (formally known as the Executive Compensation and Related Party Disclosure). This clause, if implemented, would require publicly-traded companies to disclose not only the salaries of their top five executives, but also those of top earning non-executives, including actors, directors and TV news anchors.
The term refers to former "Today Show" host Katie Couric, who became CBS's highest paid newscaster in April 2006, with a reported salary of US $15 million over five years.
As of July 26, 2006 the SEC decided not to implement this specific clause, but did agree that rules regarding highly compensated non-executives merit a subsequent look.
- A slang term for a controversial proposed clause from a Securities and Exchange Commission (SEC) rule (formally known as the Executive Compensation and Related Party Disclosure). This clause, if implemented, would require publicly-traded companies to disclose not only the salaries of their top five executives, but also those of top earning non-executives, including actors, directors and TV news anchors.
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KBW Bank Index
- An economic index consisting of the stocks of 24 banking companies. This index serves as a benchmark of the banking sector. This index trades on the Philadelphia Stock Exchange, where it was created. The KBW Index is named after Keefe, Bruyette and Woods, a recognized authority in the banking industry.
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Keefe Bank Index
- An index of regional bank and money centers. The Keefe Bank Index is compiled by Keefe, Keefe, Bruyette and Woods, an investment banking firm in New York City that focuses on banking stocks. The banks in this index are weighted according to capitalization.
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Keepwell Agreement
- A contract between a parent company and its subsidiary to maintain solvency and financial backing throughout the term set in the agreement.
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Keiretsu
- A Japanese term describing a loose conglomeration of firms sharing one or more common denominators. The companies don't necessarily need to own equity in each other.
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Keltner Channel
- A volatility based 'envelope' indicator that measures the movement of stocks in relation to an upper and lower moving-average band.
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Keogh Plan
- A tax deferred pension plan available to self-employed individuals or unincorporated businesses for retirement purposes. A Keogh plan can be set up as either a defined-benefit or defined-contribution plan, although most plans are defined contribution. Contributions are generally tax deductible up to 25% of annual income with a limit of $47,000 (as of 2007). Keogh plan types include money-purchase plans (used by high-income earners), defined-benefit plans (which have high annual minimums) and profit-sharing plans (which offer annual flexibility based on profits).
Also known as an HR(10) plan, Keogh plans can invest in the same set of securities as 401(k)s and IRAs, including stocks, bonds, certificates of deposit and annuities.
- A tax deferred pension plan available to self-employed individuals or unincorporated businesses for retirement purposes. A Keogh plan can be set up as either a defined-benefit or defined-contribution plan, although most plans are defined contribution. Contributions are generally tax deductible up to 25% of annual income with a limit of $47,000 (as of 2007). Keogh plan types include money-purchase plans (used by high-income earners), defined-benefit plans (which have high annual minimums) and profit-sharing plans (which offer annual flexibility based on profits).
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KES
- The currency abbreviation or currency symbol for the Kenyan shilling (KES), the currency for Kenya. The Kenyan shilling is made up of 100 cents and is often presented with the symbol (KSh). The Kenyan shilling is the strongest and most stable shilling in east Africa and is often used in unstable regions of Sudan and Somalia instead of local currencies.
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KES (Kenyan Shilling)
- The currency abbreviation or currency symbol for the Kenyan shilling (KES), the currency for Kenya. The Kenyan shilling is made up of 100 cents and is often presented with the symbol KSh. The Kenyan shilling is the strongest and most stable shilling in east Africa and is often used in unstable regions of Sudan and Somalia instead of local currencies.
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Key Performance Indicators - KPI
- A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their strategic and operational goals. KPIs vary between companies and industries, depending on their priorities or performance criteria. Also referred to as "key success indicators (KSI)".
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Key Person Insurance
- A life insurance policy that a company purchases on a key executive's life. The company is the beneficiary of the plan and pays the insurance policy premiums.
Also known as "key man insurance", "key woman insurance" or "business life insurance".
- A life insurance policy that a company purchases on a key executive's life. The company is the beneficiary of the plan and pays the insurance policy premiums.
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Key Rate
- The specific interest rate that determines bank lending rates and the cost of credit for borrowers. The two key interest rates in the United States are the discount rate and the Federal Funds rate.
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Key Rate Duration
- Holding all other maturities constant, this measures the sensitivity of a security or the value of a portfolio to a 1% change in yield for a given maturity.
The calculation is as follows:
Where:
P- = Security's price after a 1% decrease in yield
P+ = Security's price after a 1% increase in yield
P0 = Security's original price
- Holding all other maturities constant, this measures the sensitivity of a security or the value of a portfolio to a 1% change in yield for a given maturity.
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Key Ratio
- A mathematical ratio that illustrates and summarizes the current financial condition of a company. Key ratios can be used to easily obtain an idea of a company's financial status. Companies that are in good condition financially will have superior ratios to those that are performing poorly.
- A mathematical ratio that illustrates and summarizes the current financial condition of a company. Key ratios can be used to easily obtain an idea of a company's financial status. Companies that are in good condition financially will have superior ratios to those that are performing poorly.
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Keynesian Economics
- An economic theory stating that active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability.
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KHR
- The currency abbreviation or currency symbol for the Cambodian riel (KHR), the currency for Cambodia. The riel is made up of 100 sen and is often presented with the symbol (__). Although the riel has been used in two forms since its inception, no monetary system was used in Cambodia from 1975 to 1980.
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KHR (Cambodian Riel)
- The currency abbreviation or currency symbol for the Cambodian riel (KHR), the currency for Cambodia. The riel is made up of 100 sen. Although the riel has been used in two forms since its inception, no monetary system was used in Cambodia from 1975 to 1980.
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Kickback
- The payment of something of value to an individual with the goal of persuading or influencing his or her decision or performance in a certain situation.
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Kicker
- 1. A right, exercisable warrant, or other feature that is added to a debt instrument to make it more desirable to potential investors by giving the debt holder the potential option to purchase shares in the issuer. The kicker may or may not actually be usable; often a certain breakpoint must be reached (such as a stock price above a certain level) before the kicker has any real value.
2. In real estate, an added expense that must be paid on a mortgage in order to get a loan approved. An example would be an equity stake in receipts of a retail or rental property.
- 1. A right, exercisable warrant, or other feature that is added to a debt instrument to make it more desirable to potential investors by giving the debt holder the potential option to purchase shares in the issuer. The kicker may or may not actually be usable; often a certain breakpoint must be reached (such as a stock price above a certain level) before the kicker has any real value.
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Kicker Pattern
- A two-bar candlestick pattern that is used to predict a change in the direction of the trend for an asset's price. This pattern is characterized by a very sharp reversal in price over the span of two candlesticks; traders use it to determine which group of market participants is in control of the direction.
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Kicking The Tires
- Slang for doing the grassroots research of a prospective investment.
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Kiddie Tax
- A special tax law created in 1986 imposed on individuals under 17 years old whose earned income is more than an annually determined threshold. Any extra income earned above of the threshold is taxed at the guardian's rate.
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Kids In Parents' Pockets Eroding Retirement Savings - KIPPERS
- A slang term referring to adult children who are out of school and in their working years, but are still living at home with their parents. These parents face the challenge of managing their own finances and planning for retirement while dealing with the added expense of providing for adult offspring.
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Kijun-Sen
- A component of the Ichimoku Kinko Hyo indicator that is primarily used to measure medium-term momentum. This line is calculated by using the following formula:
The formula that is used to create the Kijun-Sen is nearly identical to the formula used to create the Tenkan-Sen except the number of time periods used in the calculation is increased to better gauge longer-term momentum.
- A component of the Ichimoku Kinko Hyo indicator that is primarily used to measure medium-term momentum. This line is calculated by using the following formula:
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Kill
- To cancel a trade or order that has been placed, but not filled.
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Killer Application
- Killer application or "killer app" is a buzzword that describes a software application that surpasses all of its competitors.
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Killer Bees
- Those who help a company fend off a takeover attempt with the use of defensive strategies.
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Kiting
- 1. The act of misrepresenting the value of a financial instrument for the purpose of extending credit obligations or increasing financial leverage.
2. A fraudulent act involving the alteration or issuance of a check or draft with insufficient funds.
- 1. The act of misrepresenting the value of a financial instrument for the purpose of extending credit obligations or increasing financial leverage.
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Kiwi
- A slang term for the New Zealand dollar (NZD). It derives its name from New Zealand's national icon - a flightless bird called a kiwi - which is pictured on one side of the country's $1 coin.
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Klinger Oscillator
- A technical indicator developed by Stephen Klinger that is used to determine long-term trends of money flow while remaining sensitive enough to short-term fluctuations to enable a trader to predict short-term reversals. This indicator compares the volume flowing in and out of a security to price movement, and it is then turned into an oscillator.
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KMF
- The currency abbreviation or the currency symbol for the Cormorian franc (KMF), the currency of Comoros. The Comorian franc is made up of 100 centimes and is often presented with the symbol CF. This currency was first printed on a series of Madagascar postage stamps that had been altered to become legal tender.
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KMF (Comorian Franc)
- The currency abbreviation or the currency symbol for the Cormorian franc (KMF), the currency of Comoros. The Comorian franc is made up of 100 centimes and is often presented with the symbol CF. This currency was first printed on a series of Madagascar postage stamps that had been altered to become legal tender.
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Knock-In Option
- A latent option contract that begins to function as a normal option ("knocks in") only once a certain price level is reached before expiration.
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Knock-Out Option
- An option with a built in mechanism to expire worthless should a specified price level be exceeded.
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Know Your Client - KYC
- A standard form in the investment industry that ensures investment advisors know detailed information about their clients' risk tolerance, investment knowledge and financial position.
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Kondratiev Wave
- An economic theory created by Soviet economist Nikolai Kondratiev that states that Western capitalist economies are susceptible to high performance volatility.
Also known as "Kondratiev cycle".
- An economic theory created by Soviet economist Nikolai Kondratiev that states that Western capitalist economies are susceptible to high performance volatility.
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Korea Stock Exchange (KSC) .KS
- The Stock Market Division of Korea Exchange, formerly an independent South Korean exchange, was established in 1956. Some of its milestones include the launching of the Stock Index Futures Market in 1996 and the Stock Index Options Market in 1997, as well as the adoption of electronic trading in 1988, warrant trading in 2000, and equity options and ETFs in 2002. Its traded instruments include stocks, bonds, ETFs and REITs.
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Korean Composite Stock Price Indexes - KOSPI
- A series of indexes that track the overall Korean Stock Exchange and its components. These indexes use a weighted average based on market calculation to calculate the value of the indexes.
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KPW
- The currency symbol or currency abbreviation for the North Korean won (KPW), the currency for North Korea. The won is divided into 100 chon and is often presented with the symbol (W). The word "won" is a hybrid of the Chinese word "yuan" and Japanese "yen".
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KPW (North Korean Won)
- The currency symbol or currency abbreviation for the North Korean won (KPW), the currency for North Korea. The won is divided into 100 chon and is often presented with the symbol W. The word "won" is a hybrid of the Chinese word "yuan" and Japanese "yen".
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Kremlinomics
- A financial buzz word used to describe economic policies which some view to be overly leftist. Kremlinomics alludes to the communist policies of the Russian government during the Cold War and is by all accounts considered an unwanted connotation in industrialized nations.
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Krugerrand Gold Coin
- A gold coin minted by the Republic of South Africa. Krugerrand gold coins contain exactly one troy ounce of gold. This coin was first minted in 1967 in order to stimulate the market for South African gold. It is considered legal tender within the country.
- A gold coin minted by the Republic of South Africa. Krugerrand gold coins contain exactly one troy ounce of gold. This coin was first minted in 1967 in order to stimulate the market for South African gold. It is considered legal tender within the country.
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KRW
- The currency abbreviation or currency symbol for the Korean won (KRW), the former currency for Korea. The won was made up of 100 chon and is often presented with the symbol (__). No banknotes denominated in won were ever issued.
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KRW (Korean Won)
- The currency abbreviation or currency symbol for the Korean won (KRW), the former currency for Korea. The won was made up of 100 chon and is often presented with a symbol that looks like the capital letter W with two horizontal dashes through the center. No banknotes denominated in won were ever issued.
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KSOP
- A qualified retirement plan that combines an employee's stock ownership plan (ESOP) with a 401(k). Under this type of retirement plan the company will match employee contributions with stock rather than cash. KSOPs benefit companies by reducing expenses that would arise by separately operating an ESOP and 401(k) retirement plans.
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Kuala Lumpur Stock Exchange (KLS) .KL
- The former name for what became the Bursa Malaysia in 2004, the Kuala Lumpur Stock Exchange was established in 1976. Its precursors were the Singapore Stockbrokers' Association, which was established in 1930 and went through several name changes over the years. Its main index is the Kuala Lumpur Composite Index.
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Kurtosis
- A statistical measure used to describe the distribution of observed data around the mean.
It is sometimes referred to as the "volatility of volatility."
- A statistical measure used to describe the distribution of observed data around the mean.
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KWD
- The currency abbreviation or currency symbol for the Kuwaiti dinar (KWD), the currency of Kuwait. The dinar is made of 1000 fils, and it is often presented with the symbol (__). The dinar has the highest value of any currency in the world.
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KWD (Kuwaiti Dinar)
- The currency abbreviation or currency symbol for the Kuwaiti dinar (KWD), the currency for Kuwait. The Kuwaiti dinar is made of 1000 fils. The dinar has the highest value of any currency in the world, with a value of US$3.42 or 2.63 euros as of April 22, 2009.
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KYD
- The currency abbreviation or currency symbol for the Cayman Islands dollar (KYD), the currency for the Cayman Islands. The Cayman Islands dollar is made up of 100 cents and is often presented with the symbol ($) or (CI$). Surprisingly, this currency is the ninth-highest in the world in terms of value.
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KYD (Cayman Islands Dollar)
- The currency abbreviation or currency symbol for the Cayman Islands dollar (KYD), the currency for the Cayman Islands. The Cayman Islands dollar is made up of 100 cents and is often presented with the symbol $ or CI$. In terms of value, the KYD is ranked ninth in the world.
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Kyoto Protocol
- An international agreement that aims to reduce carbon dioxide emissions and the presence of greenhouse gases. Countries that ratify the Kyoto Protocol are assigned maximum carbon emission levels and can participate in carbon credit trading. Emitting more than the assigned limit will result in a penalty for the violating country in the form of a lower emission limit in the following period.
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KZT
- The currency abbreviation or currency symbol for the Kazakhstan tenge (KZT) is for the currency of Kazakhstan. The tenge is made of 100 tiyn and is often presented with the symbol (__). The name of the currency denotes a set of equal scales.
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KZT (Kazakhstan Tenge)
- The currency abbreviation or currency symbol for the Kazakhstan tenge (KZT), the currency of Kazakhstan. The tenge is made of 100 tiyn and is often presented with a symbol that looks like the capital letter T with a horizontal line above it. The name of the currency denotes a set of equal scales.
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