Page 45 - PRIAA Glossary

options or forwards, designed to counter mark the market changes derived from currency fluctuations of the asset.
CURRENCY OVERLAY
Using currency futures and/or forwards on a consistent basis to mitigate currency risk.
CURRENCY SWAP
An over-the-counter (OTC) agreement between two parties to exchange payments in one currency for payments in the equivalent value of another currency. Such payments will typically involve a principal amount and interest payments.
CUSIP
A unique, nine character, alphanumeric identification
code, allocated by the Committee on Uniform Securities Identification Procedures to all registered bonds and stocks settling through the US/Canadian clearing systems.
CUSTODIAN
An agent, bank, trust company or other organisation
which holds and safeguards an individual’s, mutual fund’s or investment company’s assets for them. In addition, custodians administer securities and financial instruments on their clients’ behalf.
CUSTOM BENCHMARK
Utilised when assessing investment returns for unique risk/ return profiles for specific clients or “buy-side” investment managers. Unlike benchmarks linked entirely to a popular index such as the S&P 500, a custom benchmark is comprised of varying weights of published indices. They can also be constructed “bottom up” with varying weights on an individual constituent basis, such as 10 of the largest market cap oil companies or all government bonds issued by Japan with maturity between 25 and 30 years.
CV01
Dollar value price change resulting from a one basis point move in the credit spread.
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