General Glossary

General Glossary

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Implied volatility 

Expected volatility (i.e. the standard deviation) in the price variation rates of an asset (e.g. shares or bonds). It can be obtained from asset prices, the expiry date and the strike price of their options, as well as from a risk-free rate of return, using an option pricing model such as the Black-Scholes.

To link the interest rate applied to a credit operation or deposit to the remuneration of a financial instrument or a specific index (for example, the CPI, a Stock market index, the Euribor, etc.).
Indexed loan  
A loan whose interest rate is linked to the evolution of a specific index or to the remuneration produced by a specific financial instrument.
Internet banking 
A banking operating procedure that uses internet as an instrument for marketing and communication with clients. The client does not need to go to a branch to consult their balance or carry out operations; they only need a computer with internet access and a password that allows the institution to authenticate their identity.
Investment fund  
Asset with no legal personality created through the contributions of multiple investors. The management company that exercises the administration and representation of the fund is in charge of investing these contributions in different financial assets and instruments, whose evolution in the markets determines the positive or negative results obtained by the investors or unit-holders. The minimum investment unit is the share. The securities in which the fund invests are held by a depository, usually a credit institution, that also watches over the management company for the unit-holders. There are different types, according to the asset in which the investment is made: fixed income, variable income or mixed. Among the fixed income type, currency funds or FIAMM (Money Market Investment Fund) invest in short-term money market assets (bills up to 18 months). On the other hand, capital market funds can invest in variable as well as fixed income assets, without limit to the maturity period.