Glossary of Terms

One thousand (1,000).

For example EUR 100k = EUR 100,000.

Sometimes written "K".

In relation to options, the same as Vega.

The Kay Review into UK equity markets.

A government sponsored review into UK equity markets established in 2011 and led by Professor John Kay.

The review was established to ask how well equity markets are achieving the following core purposes:

1. Enhancing the performance of UK companies by facilitating investment and enabling effective governance and decision making in support of long-term profitability and growth; and

2. Enabling investors to benefit from this corporate activity in the form of returns from equity investment.

The review was designed assess to what extent equity market participants are excessively focused on short-term outcomes to the detriment of the core purposes (1. and 2. noted above) and if so, what actions should be taken to address this problem.

It therefore examines the incentives, motivations and timescales of the following participants in the equity markets – end investors, pension funds, advisers, fund managers, the market and company boards – and also the relationships between them.

The Kay Report published in July 2012 was welcomed by the UK Government in its response of November 2012. The Report is undergoing Commons Select Committee scrutiny.

Cost of debt.

Term used for the after tax Cost of debt, used in calculating a firm's Weighted average cost of capital.

Cost of equity.

(KPI). A measure of performance.

Such measures are used to help an organisation define and evaluate how successful it is, typically in terms of making progress towards its long-term organisational goals.

A school of economic thought, developed by John Maynard Keynes, which takes the view that active fiscal policy and, to a lesser extent, monetary policy, should be used to stimulate aggregate demand and move the economy to full employment equilibrium.

(KYC). The underlying basis of all anti-money laundering regulations, requiring financial and other intermediaries engaged in financial transactions to rigorously check their customers’ identities.

Key Performance Indicator.

One of the largest worldwide professional services firms and auditors.

Key Risk Indicator.

A statistical measure of the shape of a frequency distribution, in relation to a comparable normal distribution.
Kurtosis measures the relative degree of clustering of observations in the tails of the distribution and around its mean.

Know-Your-Customer.