Hamanaka, Yasuo A rogue trader whose speculative activities during the 1980s and 1990s cost Sumitomo Corp. USD 1.8 billion.

Hammersmith and Fulham decision A 1992 legal decision that invalidated existing derivatives contracts with numerous UK local councils.

harmonization Making regulations consistent across industries.

hazard rate Default intensity.

head of risk management A senior manager with responsibility for financial risk management within a firm.

hedge fund A largely unregulated investment fund that specializes in taking leveraged speculative positions.

hedging The taking of offsetting risks.

Herstatt Bank A German bank whose 1974 failure highlighted the dangers of settlement risk.

Herstatt risk Settlement risk.

Hessian In calculus, a matrix of second partial derivatives.

heteroskedasticity A condition where a stochastic process has non-constant second moments.

high-water mark In investment management, a provision that an incentive fee will not be payable until any prior losses have first been made up.

high yield bond Junk bond.

historical transformation For a VaR measure, a transformation procedure that employs the Monte Carlo method with realizations constructed from historical market data..

historical VaR A category of VaR measures that employ an historical transformation.

historical volatility A volatility estimated from historical data.

holder extendible option An option that grants the holder the right to extend the expiration date.

holdings A row vector listing the number of units of specific assets held by a portfolio.

holdings remapping A type of portfolio remapping.

homoskedasticity A condition where a stochastic process has constant second moments.

hub-and-spoke arrangement A means of packaging a mutual fund for multiple distribution channels.

hurdle rate In investment management, a provision that incentive fees will be paid only for returns exceeding some specified level.

hybrid instrument A financial instrument that blend characteristics of debt and equity markets.

hypothecation The posting of collateral.