Glossary List L

Laggard:

Laggard is a stock or a security that has been underperforming. Such stocks provide lower than average returns when compared to the market.

Lagging Indicator:

This is an economic factor that is measurable and which changes after the economy starts to follow a pattern or a trend. Such indicators also lag the asset price and a move in the market occurs even before the indicator provides the signal.

Laissez Faire:

Laissez Faire is a belief that states that businesses and economies have a proper functioning if there is no government interference. This is also one of the capitalism guiding principles.

Large cap:

Large cap, also known as big cap is used as a reference to a company that has a market capitalization value higher than $10 billion. This is the short version of “large market capitalization”.

LBP:

LBP is the currency symbol used for Lebanese Pound, which is the currency used in Lebanon. The LBP is made of 100 qirsh and is presented with the (__) symbol.

Lead Manager:

Lead Manager is an investment or a commercial bank which holds a primary responsibility to organize a given bond or a credit issuance. The banks will asses various market conditions, negotiate the terms with issuer and also find other lending firms to create a syndicate.

Lead Reinsurer:

Lead Reinsurer, also known as lead underwriter is the one responsible to negotiate the rates and the terms of reinsurance treaty. Lead reinsurer is the first party that would sign the reinsurance contract.

Leads and Lags:

When an expected change in exchange rates leads to the change in the normal payment of foreign exchange transactions, it is known as leads and lags. When an expected increase in the rates can speed up the payment, a decrease can slow the payments down.

Lead time:

Lead Time is the time which elapses between the start of a process and its completion. This is very closely examined in project management, manufacturing and supply chain management as the firm wants to reduce the time taken for the product delivery to market.

Lead Underwriter:

Lead Underwriter is an investment bank that gets a primary directive to organize the IPO or a secondary offering for firms which have already traded publicly.

Lease hold:

This is a term used in accounting to classify an asset on the balance sheet of a company which is leased. To be classified as leased asset, the company should have an operating lease agreement.

Leveraged Buy-out (LBO):

Leveraged Buy-out occurs when there is an acquisition of a company by using the amount of money borrowed to meet the acquisition costs. The assets of the company that is being acquired and that of the acquiring company, are often used as collateral for loans.

Life cycle funds:

Life cycle funds refer to a specific category of asset allocation or mutual fund where in a fund portfolio, the proportional depiction of asset class is adjusted automatically at the time of the mutual fund’s time horizon.

Limit Order:

A limit order is a take profit order that is placed with the brokerage firm to sell or buy a specified amount of financial instruments at the set price or a better price. Limit order is not a market order.

Liquid assets:

Liquid assets are the assets that can easily be converted into cash and there is no major impact on the price that is received in the open market. These assets include government bonds and money market instruments.

Load:

Load refers to the commission or a charge which an investor is charged when buying or selling shares in mutual funds. This can be a onetime fee that is charged when the investor buys into the fund or when the mutual fund is redeemed or can also be charged on annual basis.

Lock in period:

This is also referred to as lock in or locked up period and is a prefixed amount of time when the large shareholders of a company, after an IPO are restricted from selling the shares they hold.

Long term capital gains (LTCG):

Long term capital gains are the gains that are obtained from an investment that is held for more than 12 months before being sold. The amount gained is the difference between the value of sale and the purchase value.

Loro account:

Loro Account is used in reference to a Vostro account, where a correspondent bank holds an account on the behalf of another bank. Such accounts form an essential part of correspondent banking and the bank holding the funds would act as the custodian.

Lower circuit:

Lower circuit in stock market occurs when the markets are falling consistently. Investors find it hard to exit their positions from the stocks that have hit the lower circuit.

L-Shaped Recovery:

When an economic recession and its recovery resemble the shape of “L” in charting, it is known as L Shaped Recovery. Such chart represents various economic measures like GDP, employment and industrial output.