Base probability of loss

Similar financial terms

Zero-base budgeting
The zero-base budgeting (ZBB) method disregards the previous year's budget in setting a new budget, since circumstances may have changed. Each and every expense must be justified in this system.

Base Currency
In terms of foreign exchange trading, currencies are quoted in terms of a currency pair. The first currency in the pair is the base currency. The base currency is the currency against which exchange rates are generally quoted in a given country. Examples: CHF/JPY, the Swiss franc is the base currency; EUR/USD, the EURO is the base currency.

Money base
Composed of currency and coins outside the banking system plus liabilities to the deposit money banks.

Common-base-year analysis
The representing of accounting information over multiple years as percentages of amounts in an initial year.

Basel II (Basel Capital Accord)
Basel II - short for the new Basel Capital Accord - lays down new guidelines for determining the minimum solvency requirements for banks. The main change in these guidelines is a new system for weighting the risks run by banks in their loans to retail and corporate customers. The objective of Basel II is to improve the soundness of the financial system.

Basel Committee on Banking Supervision
A committee that meets under the auspices of the Bank for International Settlements in Basel, Switzerland to set bank regulatory standards.

Probability function
A function that assigns a probability to each and every possible outcome.

Probability distribution
Also called a probability function, a function that describes all the values that the random variable can take and the probability associated with each.

Probability density function
The probability function for a continuous random variable.

Probability
The relative likelihood of a particular outcome among all possible outcomes.

Normal probability distribution
A probability distribution for a continuous random variable that is forms a symmetrical bell-shaped curve around the mean.

Cumulative probability distribution
A function that shows the probability that the random variable will attain a value less than or equal to each value that the random variable can take on.

Stop-loss order
An order to sell a stock when the price falls to a specified level.

Residual losses
Lost wealth of the shareholders due to divergent behavior of the managers.

Paper gain (loss)
Unrealized capital gain (loss) on securities held in portfolio, based on a comparison of current market price to original cost.

Net operating losses
Losses that a firm can take advantage of to reduce taxes.

Capital loss
The difference between the net cost of a security and the net sale price, if that security is sold at a loss.

Profit and Loss Account
An accounting statement that shows a company's trading position over a given period of time - usually the financial year. This statement details the sales revenue and business expenditure over the period. In the account, the cost of sales is deducted from the sales income to provide a gross profit. From this, other items of expenditure, such as salaries, rent, rates and other itemised costs are deducted to show a net profit (or loss). In US and under IFRS known as the Income Statement.