BA Bankers acceptance.

BA rate Bankers acceptance rate.

Bachelier, Louis French researcher famous for his 1900 doctoral thesis, which discovered Brownian motion and anticipated the random walk hypothesis.

back-end load Deferred sales charge deducted from the proceeds when an investor sells shares in an open-end mutual fund.

backfill A questionable practice of adjusting historical values of an index to reflect past performance of an asset just added to that index.

backwardation A condition where spot prices exceed forward prices.

balance sheet CDO A CDO issued for the purpose of moving assets off the sponsor's balance sheet.

BAN Bond anticipation note.

bank discount yield A convention for calculating yield on a discount instrument.

Bank for International Settlements An international organization which fosters international monetary and financial cooperation and serves as a bank for central banks.

Bank Holding Company Act of 1956 A revoked US law that had limited the services commercial banks could offer clients.

bank run A situation where fear of a bank failing motivates massive deposit withdrawals.

bankers acceptance An acceptance that has a bank as its drawee.

bankers acceptance rate The interest rate at which a bankers acceptance is quoted

Banking Act of 1933 The United States Glass-Steagal Act that separated commercial and investment banking and formed the FDIC.

Barings debacle In February 1995, Britain's oldest merchant bank failed due to unauthorized trading by a single individual at its Singapore office.

barrier option A path dependent option that terminates or is activated by the underlier reaching some "barrier" level.

Barry, John D. One of the managers of Beacon Hill Asset Management, accused of defrauding hedge fund investors in 2002.

base currency The currency in which a VaR measure quantifies market risk.

Basel II An international accord on bank capital requirements to replace the earlier 1988 Basel Accord.

Basel Accord (1988) An international accord on bank capital requirements.

Basel Accord (1996 Amendment) An amendment to the 1988 Basel Accord that added capital requirements for market risk.

Basel Committee An international committee that has has played a leading role in standardizing bank regulations across jurisdictions.

Basel-IOSCO initiative A 1991 initiative to globally harmonize capital requirements for banks and securities firms.

basis A spread. Often the spread between a futures price and the spot price of its underlier.

basis point A hundredth of a percent.

basis risk Risk from exposure to uncertain spreads.

basis swap A floating-for-floating interest rate or currency swap.

basket option An option on a portfolio or "basket" of underliers.

BBA Libor Any of several indicative Libor rates compiled by the British Bankers Association.

Beacon Hill Asset Management A firm accused of defrauding hedge fund investors in 2002.

bear spread A put spread.

bearer bond A bond for which ownership is evidenced by possession of a certificate.

below par Selling for a price below par value.

below investment grade bond Junk bond.

Berger, Michael Manager of the Manhattan Fund, a hedge fund that defrauded investors during the 1990s.

Bermudan exercise A provision that permits exercise of an option on any of several days prior to expiration.

beta A metric of systematic risk.

better-of option A form of rainbow option.

bid-ask spread The difference between prices at which dealers are willing to buy or sell.

bid-offer spread Bid-ask spread.

bilateral loan A loan made by a single lender to a single borrower.

bilateral netting Netting of obligations between two parties.

bill of exchange A draft used in international trade.

binary option A type of option which features a discontinuous expiration value.

BIS Bank for International Settlements.

Black (1976) option pricing formula A pricing formula for European options on commodities, forwards or futures.

Black '76 Black (1976) option pricing formula

Black-Scholes (1973) option pricing formula The original option pricing formula published by Black and Scholes in their landmark (1973) paper. Used to price European options on non-dividend-paying stocks.

Black-Scholes Theory Another name for option pricing theory.

Black's model Black (1976) option pricing formula

Boesky day November 14, 1986, the day it was announced that Ivan Boesky had pled guilty to insider trading and was cooperating with government investigators.

Boesky, Ivan An insider trader of the 1980s.

bond Securitized debt.

bond anticipation note A type of municipal security.

bond-equivalent yield A convention for converting discount yields to a form more comparable to bond yields.

bond value Investment value of a convertible bond.

book entry bond A bond for which ownership records are maintained electronically in lieu of certificates.

book value Acquisition cost less depreciation.

Borodovsky, Lev Co-founder of the scandal-rocked Global Association of Risk Professionals.

Brady bond A bank loan repackaged as a bond under a 1980s debt restructuring for less-developed countries.

broker-dealer Securities firm.

Brownian motion A simple continuous stochastic process that is widely used in physics and finance for modeling random behavior that evolves over time.

Bubble Act An 18th century English law that severely restricted the formation of new corporations.

bull spread A call spread.

bulldog A foreign bond issued in the United Kingdom.

bundle Eurodollar bundle.

business risk Exposure to uncertainty in economic value that cannot be marked-to-market.

busted A convertible bond is busted if its conversion option is far out of the money.

butterfly spread An options spread that combines a long strangle with a short straddle.

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