Motilal Oswal Glossary: Financial Terms Starting with "V"

Glossary List starting with Alphabet

Valuation Opportunity Cost
Valuation Opportunity Cost is the unprecedented increase in value of a firm that deals with investments. These are investments foregone on account of capital rationing. Capital rationing is nothing but placing a limit on investments a company can have.
Value Added Tax
Value Added Tax or VAT is a tax that is levied on consumers for any form of value addition made to the product during the time of manufacture and at the time of the final sale. VAT is calculated as the cost of the product less cost of materials used that have already been taxed.
Value at risk
Value at Risk is commonly abbreviated as VaR. This is a convenient technique adopted by financial advisors to assess or quantify the level of financial risk that is prevalent within a firm or a leading investment console at a given time-frame.
Value at Risk model
This is how Value at Risk or VaR model is being applied. Suppose a financial firm has assets worth XYZ, out of which 3 % assets have a one month VaR of 2 %. In other words 3 % of assets can decline in value to 2 % over a one month's time-frame.
Value fund
Value fund is a form of mutual fund or stock that has got its price undervalued. These are funds that can generate higher amount of dividends and belong to mutual funds' category of investments.
Value plus trading
Some of the investment firms and financial exchange companies provide investors with a dual advantage platform. They can perform trade with value oriented shares and stocks and get exposure to trade with higher volumes as well and the concept is known as value plus trading.
Value stock
Value stock is a stock that is undervalued in relation to its core fundamentals (Dividends, earnings and sales turn-over). Despite yielding higher dividends to the investor, the valuer still undermines the same. These stocks are further characterized by a) high dividend yield b) Lower price to book ratios and c) Lower price to earnings ratio.
Vega in financial parlance is nothing but a way of measuring the worth of an underlying asset. The underlying value of an asset, stock or derivative is susceptible to changes due to the volatility thrown by the market.
Vertical mergers
Merger is nothing but two companies getting clubbed into one. A vertical merger happens when two companies operating at separate stages of the production process merge together to bring about the final finished product.
Vertical spread
This is a trading strategy wherein a trader simultaneously purchases and sells two options belonging to the same type. The options or derivatives can have the same expiration dates but different strike prices.
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