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Financial terms in "Legal"

1. Undisclosed Principal

2. recapture

3. fiduciary

4. Vendor

5. Uniform transfers to minors act

6. Eeoc

7. sublease

8. Counsel

9. barratry

10. Corporate Opportunity

11. Canon Law

12. Millage

13. Restrictive endorsement

14. attestation clause

15. tortfeasor

16. Alias

17. Under The Influence

18. Predecease

19. Constitution

20. Disinheritance

21. Necessaries

22. Work For Hire

23. Covenant Marriage

24. Mine Safety And Health Administration

25. paralegal

26. Deep Link

27. Mccain-Feingold Act

28. Stirpes

29. meeting of the minds

30. Fair Market Value

31. Consanguinity

32. Yellow-Dog Contract

33. Darby V. United States (1941)

34. affiant

35. De Facto

36. Assessed Value

37. Attorney-in-Fact

38. Bail Bondsman

39. straight line depreciation

40. Forum Non Conveniens

41. Quasi-Criminal

42. Tax Registration Certificate

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44. Vendee

45. Credit File

46. In Re Gault (1967)

47. Owner

48. assume

49. Hot Pursuit

50. Unlawful

51. trade fixture

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53. Antenuptial Agreement

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55. Bailiff

56. home equity

57. foreign corporation

58. Felony

59. reasonable time

60. Construction

61. Contingent Trust

62. payback clause

63. Supernumerary Witness

64. Egress

65. Dependent

66. Subsidiary

67. Probate Court

68. Imprison

69. quasi contract

70. statute of limitations

71. Peeping Tom

72. Offset

73. Health Maintenance Organization (HMO)

74. Res

75. State Court

76. Miranda V. Arizona (1966)

77. Booking

78. Geneva Conventions

79. Business License

80. Apn

81. stare decisis

82. legal

83. Mercantile Law

84. Whole Life Insurance

85. Administrator With Will Annexed

86. Defect

87. notorious possession

88. Mutual Wills

89. Fape

90. improvement

91. SET

92. GATT

93. Citizen

94. exculpatory clause

95. Nol. Pros.

96. Equitable Distribution

97. Cash Method Of Accounting

98. Bifurcate

99. PTO

100. Treasury stock

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Definition / Meaning of

Stale Price Arbitrage

Categories: Finance,

for a number of assets, the most recent transaction price at 4PM ET does not fully reflect all available market information. One example is international equities that trade on exchanges that are located in different time zones and close 2-15 hours before U.S. markets. In addition, domestic small-capitalization equities and high-yield and convertible bonds often trade infrequently and have wide bid-ask spreads. This can cause the most recent transaction price to be much different from the price that one would see in a liquid market at 4 PM, even for assets that trade on exchanges that are open at that time. Investors can take advantage of mutual funds that calculate their NAVs using stale closing prices by trading based on recent market movements. For example, if the U.S. market has risen since the close of overseas equity markets, investors can expect that overseas markets will open higher the following morning. Investors can buy a fund with a stale-price NAV for less than its current value, and they can likewise sell a fund for more than its current value on a day that the U.S. market has fallen. Similar opportunities exist when the values of infrequently or illiquidly-traded domestic assets have recently changed. With normal market arbitrage, as more traders learn where to buy an item at relatively low cost and where to sell it at relatively high value, market pressures from such traders tend to stabilize prices. With stale price arbitrage, there is no corresponding pressure for market correction. That is, a fund always pays the going market rate even if that fund has an agreement with its customers to only charge them the price from the prior day closing. Accordingly, even if such agreements ultimately impact the prices of trades by the mutual funds, there is no impact on the price paid by the customer of the mutual fund. In that sense, the stale price arbitrage opportunity can last as long as a mutual fund honors its stale price agreement with its customers. Also referred to as net asset value arbitrage or nav arbitrage.

Most popular terms

1. Disclosure
2. Audit Committee
3. Section 15 Declaration Of Incontestability
4. Bankruptcy Proceedings
5. Nonprofit
6. Budapest Stock Exchange (BSE)
7. Life Settlement
8. Standard & Poor's Depositary Receipt (SPDR)
9. Contingent Commission
10. Manufacturers Output Policy (MOP)

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