What it is and Who Needs it

What it is and Who Needs it

What Is Credit Life Insurance? Credit life insurance is a type of life insurance policy designed to pay off a borrower’s outstanding debts if the policyholder dies. It’s typically used to ensure you can paydown a large loan like a mortgage or car loan. The face value of a credit life insurance policy decreases proportionately with the outstanding loan amount

Covered Earnings

Covered Earnings

What Are Covered Earnings? Covered earnings refer to the total amount of an employee’s pay that counts toward the calculation of retirement benefits. Generally, the bulk of covered earnings comes from an employee’s base pay, though occasionally other types of compensation factor in as well. In the U.S., the Social Security Administration uses covered earnings to

Lined Passion Arbitrage: Definition, Example, Vs. Uncovered

Lined Passion Arbitrage: Definition, Example, Vs. Uncovered

What Is Covered Interest Arbitrage? Covered interest arbitrage is a strategy in which an investor uses a forward contract to hedge against exchange rate risk. Covered interest rate arbitrage is the practice of using favorable interest rate differentials to invest in a higher-yielding currency, and hedging the exchange risk through a forward currency contract. Covered

Coated Interest Worth Parity: Definition, Calculation, and Example

Coated Interest Worth Parity: Definition, Calculation, and Example

What Is Covered Interest Rate Parity? Covered interest rate parity refers to a theoretical condition in which the relationship between interest rates and the spot and forward currency values of two countries are in equilibrium. The covered interest rate parity situation means there is no opportunity for arbitrage using forward contracts, which often exists between countries with different

Coated Stock (Coverage) Definition

Coated Stock (Coverage) Definition

What Is a Covered Stock (Coverage)? A covered stock refers to a public company’s shares for which one or more sell-side equity analysts publish research reports and investment recommendations for their clients. Upon commencement of coverage, an analyst will publish an “initiating coverage” report on the stock and subsequently issue research updates, often after quarterly and annual

Coated Author Definition

Coated Author Definition

What Is a Covered Writer? A covered writer is an investor or trader who holds the underlying security as a hedge against the options contract they are selling. Since the investor already owns the underlying asset, they may cover any call before or at the expiration date of the option, thus limiting risk. Key Takeaways