Glossary List V

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 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 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.

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 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.

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 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.

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.

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.

Vienna Stock Exchange (VSX) is a stock exchange that is located in Vienna, Austria. Popularly abbreviated as VSX, it is one of the busiest stock exchanges that facilitate at least 60 % of stocks traded in Austria.

Vignette is a symbolic representation of the corporate or the company that is involved with issuing the shares, derivatives or investment bonds. The symbol or the logo of the issuing company (s) is depicted on the share certificate, in order to make counterfeiting of share certificates as difficult as possible.

Virtual currency is otherwise known as digital money. Though the currency is not issued by a central banking authority, one can store and transfer shares or securities using digital money. Some brokerage firms allow its members to use the virtual currency option to buy and sell shares.

Volatility Index is a sticker that is widely used by the Chicago Board Options Exchange or CBOE. Shortly abbreviated as VIX, the index reveals the market's expectation in terms of volatility over a 30 day period. VIX is also construed using call and put options and trade analysis charts.

Trade exchange firms make use of volatility ratio as a technical indicator to identify price-ranges and break outs. The volatility ratio makes use of authentic price ranges an underlying stock or share is into.

Vostro account is an account of one bank held into the account of another bank. These accounts form an integral part of the correspondent banking system wherein the bank that holds or manages the funds of the other bank acts as a custodian for and manages the account of a foreign counterpart.