Page 38 - PRIAA Glossary

CONTRACT OF AFFREIGHTMENT (COA)
An agreement between a ship owner and charterer providing for the transportation of a specific quantity of cargo over
a specific time period. Commonly used in the chemical parcel trade, the charterer nominates cargos at the agreed intervals, and the ship owner nominates any vessel from his fleet to perform the voyage.
CONTROL FRAMEWORK
A set of guidelines designed by financial institutions to check for internal fraud and to improve risk and capital management.
CONVERGENCE
The movement of the cash asset price toward the futures price as the expiration date of the futures contract approaches.
CONVEXITY
Denotes a non-linear relationship between two variables. Within a financial context, the term convexity can be used
to describe a non-linear price/yield relationship for a fixed-income security. It can also be used for derivatives
to describe a situation whereby the payoff of a derivative security is not linear with respect to price movements in the underlying asset.
COPPER RECORDS
A unilaterally submitted, non-legal representation of a trade submitted to the DTCC TIW. Copper records were introduced in July 29 to meet the industry requirement to centrally record non-electronically confirmed transactions in a trade repository for CDS contracts.
COPULA
A statistical tool describing how the distribution of
single risks join together to form joint risk distribution. Copulas are used in the valuation of synthetic collateralised debt obligation (CDO) tranches and other correlation- sensitive products.
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