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Keepwell Agreement

Keepwell Agreement What is 'Keepwell Agreement' A contract between a parent company and its subsidiary to maintain solvency and financial backing throughout the term set in the agreement.

Hara-Kiri Swap

Hara-Kiri Swap What is 'Hara-Kiri Swap' An interest rate or cross-currency swap devoid of any profit margin for the originator. The term gets its name from Japanese banks' and securities h

Hamada Equation

DefinitionIn corporate finance, Hamada's equation, named after Robert Hamada, is used to separate the financial risk of a levered firm from its business risk. The equation combines the Modig

Impaired Credit

Impaired Credit What is 'Impaired Credit' A deterioration in the creditworthiness of an individual or entity. This is usually reflected through a lower credit score, in the case of an indi

Implied Contract

DefinitionA quasi-contract is a fictional contract recognised by a court. The notion of a quasi-contract can be traced to Roman law and is still a concept used in some modern legal systems.

Illiquid Option

Illiquid Option What is 'Illiquid Option' An option contract that cannot be sold for cash quickly at the prevailing market price. Illiquid options have very low or no open interest. Expl

Macroeconomic Swap

Macroeconomic Swap What is 'Macroeconomic Swap' A type of derivative designed to help companies whose revenues are closely correlated with business cycles to reduce their business-cycle ri

Absolute Priority

Absolute Priority What is an 'Absolute Priority' An absolute priority is a rule that stipulates the order of payment - creditors before shareholders - in the event of liquidation. The abso

Cancellation Provision Clause

Cancellation Provision Clause What is 'Cancellation Provision Clause' It is a provision in an insurance policy that permits an insurer or an insurance company to cancel a property and casu

Call Swaption

Call Swaption What is 'Call Swaption' A type of option between two parties that can be exercised on a swap where the buyer of the swap has the right, but not obligation, to receive an agre
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