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Z

Fifth letter of a NASDAQ stock symbol specifying that it is a fifth class of preferred stock, a stub, a certificate representing a limited partnership interest, foriegn preferred when issued, or a second class of warrants.

Z.B.A.

See: Zero balance account

Zabara

Mainly applies to international equities. Japanese securities transactions conducted on the principal of auction, i.e., (1) price priority in that the selling (buying) order with the lowest (highest) price takes precedence over other orders, and (2) time priority in that an earlier order takes precedence over other orders at the same price.

Z bond

Also known as an accrual bond or accretion bond; a bond on which interest accrues interest but is not paid currently to the investor but rather is accrued, with accrual added to the principal balance of the Z and becoming payable upon satisfaction of all prior bond classes.

Zero-balance account (Z.B.A.)

A checking account in which zero balance is maintained by transfers of funds from a master account in an amount only large enough to cover checks presented.

Zero-beta portfolio

A portfolio constructed to have zero systematic risk, similar to the risk-free asset, that is, having a beta of zero.

Zero-coupon bond

A bond in which no periodic coupon is paid over the life of the contract. Instead, both the principal and the interest are paid at the maturity date.

Zero-investment portfolio

A portfolio of zero net value established by buying and shorting component securities, usually in the context of an arbitrage strategy.

Zero-minus tick

Used in the context of general equities. Sale that takes place at the same price as the previous sale, but at a lower price than the last different price. Antithesis of zero-plus tick.

Zero-one integer programming

An analytical method that can be used to determine the solution to a capital rationing problem.

Zero prepayment assumption

The assumption of payment of scheduled principal and interest with no payments.

Zero-plus tick

Used for listed equity securities. Transaction at the same price as the preceding trade, but higher than the preceding trade at a different price. Antithesis of zero-minus tick. See: short sale.

Zero-sum game

A type of game wherein one player can gain only at the expense of another player.

Zero uptick

Related: tick-test rules.

Z score

Statistical measure that quantifies the distance (measured in standard deviations) a data point is from the mean of a data set. Separately, Z score is the output from a credit-strength test that gauges the likelihood of bankruptcy.

 

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