The role of this glossary is to present brief definitions of most of the key concepts in economics and finance (in total 1064 names-definitions) as well as security markets (financial, capital, money) with aim the reader to be able to understand and become familiar with the terminology in the analyses that will present in the category economics.
Additionally, we hope that the reader by acquiring intimacy with the economic terminology, he will also love the science/art of economics, giving to it a significant part of his personal time.
In the following glossary we tried to include the most well-known definitions and terms in the field of Economics & Finance. If you still find that a term or definition is missing and you know that it can be included in this glossary, please do not hesitate to contact us via the contact form of our web-site (Contact Us) and the Liberal Globe will edit it and will include it.
Glossary Economics & Finance
There are currently 34 names in this directory beginning with the letter O.
Off-balance sheet activities (banks)
are called all those bank activities which affect bank profits but are not visible on bank balance sheets i.e. creation of income from fees and loan sales, trading financial instruments etc.
Official lenders
are called the international organizations (i.e. the IMF, the World Bank, the EBRD) that lend money to countries for development or macroeconomic stabilization purposes.
Official reserve transactions
are equal to the current account balance plus items in the capital account.
Offshore markets
are named all those markets for assets which are denominated in a country's currency, but they are located outside that country.
Okun's law
is the condition which describes the observed inverse relationship between fluctuations of real GDP around its trend growth path and fluctuations of the unemployment rate around its equilibrium level.
Open end fund (mutual fund)
is called the most common structure of mutual fund in which shares can be redeemed at any time at a price that is tied to the asset value of the fund.
Open market operations
are called the transactions which are undertaken by a central bank in order to exchange securities against its own liabilities; these operations have target to supply reserves, or to drain reserves from, the banking system.
Open order (a good-till-cancelled order)
is called a trading order which remains in effect until it is either filled or cancelled by the investor.
Operating target
is named the total set of variables like the reserve aggregates or interest rates, that the FED seeks to influence because they are responsive to its policy tools.
Opportunity set (feasible set)
is called the set of all portfolios that can be formed from the group of securities being considered by an investor.
Optimal capital stock
is named the stock of physical capital that maximizes the value of the firm, for which the marginal productivity of capital is equal to the marginal cost of investment.
Optimal currency area
is named that region for which no welfare loss is implied using a common currency.
Optimal forecast
is called the best possible prediction of the future using all available information.
Optimal portfolio
is called the feasible portfolio that offers an investor the maximum level of satisfaction. This portfolio denotes the tangency between the efficient set and an indifference curve of the investor.
Option (call and put)
is named a contract that allows the owner to purchase (call) or sell (put) an asset at some predetermined price at or before some specified point in time.
Order book officials
are called the people who keep the limit order book in those option markets that involve market-makers instead of specialists.
Order specification
is called the set of investor's instructions to a broker as it concerns the characteristics of a trading order. Specifically, it includes the name of the security's issuing firm, whether to buy or sell, order size, maximum time the order is to be outstanding and the type of order to be used.
Organized exchange
is called a central physical location in which the trading of securities take place following a set of rules and regulations.
Original issue discount security
is called a security which is issued with its coupon interest rate to be below the prevailing market interest rates on similar securities and for this reason it is originally sold at a discount from par value.
Out of money option
for a call (put) option, is named the option whose exercise price is greater than (less than) the market price of its underlying asset.
Out-of-sample data (holdout sample)
in the frame of creating a security valuation model, is called that information which is obtained during periods which are different than those which are used to estimate the valuation model.
Over margin account (unrestricted account)
is called a margin account in which the actual margin has risen above the initial margin requirement.
Over subscription privilege
is called the opportunity which is given to shareholders who have exercised their rights in a right offering to buy shares that were not purchased in the offering.
Over the counter (OTC) market
is called the secondary market in which dealers at different locations who have an inventory of securities stand ready to buy and sell securities "over the counter" to anyone who comes to them and is willing to accept their prices.
Overpriced security (overvalued security)
is called that security whose expected return is less than its equilibrium expected return. In other words, a security with a negative alpha.
