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Window contract A guaranteed investment contract purchased with deposits over some future designated
time period (the "window"), usually between 3 and 12 months. All deposits made are guaranteed the same
credit rating. Related: bullet contract.

Winners's curse Problem faced by uninformed bidders. For example, in an initial public offering uninformed
participants are likely to receive larger allotments of issues that informed participants know are overpriced.

Wire house A firm operating a private wire to its own branch offices or to other firms, commission houses or
brokerage houses.

With dividend Purchase of shares in which the buyer is entitled to the forthcoming dividend. Related: ex-
dividend.

With rights Purchase of shares in which the buyer is entitled to the rights to buy shares in the company's
rights issue.

Withdrawal planThe ability to establish automatic periodic mutual fund redemptions and have proceeds
mailed directly to the investor.

Withholding tax A tax levied by a country of source on income paid, usually on dividends remitted to the
home country of the firm operating in a foreign country. Tax levied on dividends paid abroad.

Without If 70 were bid in the market and there was no offer, the quote would be "70 bid without." The
expression "without" indicates a one-way market.

Without recourse Without the lender having any right to seek payment or seize assets in the event of
nonpayment from anyone other than the party (such as a special-purpose entity) specified in the debt contract.

Woody Sexual slang for a market moving strongly upward, as in, "This market has a woody."

Working capital Defined as the difference in current assets and current liabilities (excluding short-term
debt). Current assets may or may not include cash and cash equivalents, depending on the company.

Working capital management The management of current assets and current liabilities to maximize short-
term liquidity.

Working capital ratio Working capital expressed as a percentage of sales.

Workout Informal arrangement between a borrower and creditors.
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Workout period Realignment period of a temporary misaligned yield relationship that sometimes occurs in
fixed income markets.

World Bank A multilateral development finance agency created by the 1944 Bretton Woods, New
Hampshire negotiations. It makes loans to developing countries for social overhead capital projects, which are
guaranteed by the recipient country. See: International Bank for Reconstruction and Development.

World investible wealth The part of world wealth that is traded and is therefore accessible to investors.

Write-down Decreasing the book value of an asset if its book value is overstated compared to current market
values.

Writer The seller of an option, usually an individual, bank, or company, that issues the option and
consequently has the obligation to sell the asset ( if a call) or to buy the asset (if a put) on which the option is
written if the option buyer exercises the option.

W-type bottom A double bottom where the price or indicator chart has the appearance of a W. See: technical
analysis.

Yankee bonds Foreign bonds denominated in US$ issued in the United States by foreign banks and
corporations. These bonds are usually registered with the SEC. For example, bonds issued by originators with
roots in Japan are called Samurai bonds.

Yankee CD A CD issued in the domestic market, typically New York, by a branch of a foreign bank.

Yankee market The foreign market in the United States.

Yard Slang for one billion dollars. Used particularly in currency trading, e.g. for Japanese yen since on
billion yen only equals approximately US$10 million. It is clearer to say, " I'm a buyer of a yard of yen," than
to say, "I'm a buyer of a billion yen," which could be misheard as, "I'm a buyer of a million yen."

Yield The percentage rate of return paid on a stock in the form of dividends, or the effective rate of interest
paid on a bond or note.

Yield curve The graphical depiction of the relationship between the yield on bonds of the same credit quality
but different maturities. Related: Term structure of interest rates. Harvey (1991) finds that the inversions of
the yield curve (short-term rates greater than long term rates) have preceded the last five U.S. recessions. The
yield curve can accurately forecast the turning points of the business cycle.

Yield curve option-pricing models Models that can incorporate different volatility assumptions along the
yield curve, such as the Black-Derman-Toy model. Also called arbitrage-free option-pricing models.

Yield curve strategies Positioning a portfolio to capitalize on expected changes in the shape of the Treasury
yield curve.

Yield ratio The quotient of two bond yields.

Yield spread strategies Strategies that involve positioning a portfolio to capitalize on expected changes in
yield spreads between sectors of the bond market.

Yield to call The percentage rate of a bond or note, if you were to buy and hold the security until the call date.
This yield is valid only if the security is called prior to maturity. Generally bonds are callable over several
years and normally are called at a slight premium. The calculation of yield to call is based on the coupon rate,
length of time to the call and the market price.
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Yield to maturity The percentage rate of return paid on a bond, note or other fixed income security if you
buy and hold it to its maturity date. The calculation for YTM is based on the coupon rate, length of time to
maturity and market price. It assumes that coupon interest paid over the life of the bond will be reinvested at
the same rate.

Yield to worst The bond yield computed by using the lower of either the yield to maturity or the yield to call
on every possible call date.

Z bond Also known as an accrual bond or accretion bond; a bond on which interest accretes interest but is not
paid currently to the i nvestor but rather is accrued, with accrual added to the principal balance of the Z and
becoming payable upon satisfaction of all prior bond classes.

Z score Statistical measure that quantifies the distance (measured in standard deviations) a data point is from
the mean of a data set. Separately, z score is the output from a credit-strength test that gauges the likelihood of
bankruptcy.

Zero coupon bond Such a debt security pays an investor no interest. It is sold at a discount to its face price
and matures in one year or longer.

Zero prepayment assumption The assumption of payment of scheduled principal and interest with no
payments.

Zero uptick Related: tick-test rules.

Zero-balance account (ZBA) A checking account in which zero balance is maintained by transfers of funds
from a master account in an amount only large enough to cover checks presented.

Zero-beta portfolio A portfolio constructed to represent the risk-free asset, that is, having a beta of zero.

Zero-coupon bond A bond in which no periodic coupon is paid over the life of the contract. Instead, both the
principal and the interest are paid at the maturity date.

Zero-investment portfolio A portfolio of zero net value established by buying and shorting component
securities, usually in the context of an arbitrage strategy.

Zero-one integer programming An analytical method that can be used to determine the solution to a capital
rationing problem.

Zero-sum game A type of game wherein one player can gain only at the expense of another player.

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