Replacement Risk

Replacement Risk
The risk that a contract holder will know that the counterparty will be unable to meet the terms of a contract, creating the need for a replacement contract.

Also known as "replacement-cost risk".

For example, if a counterparty in an agreement fails to fulfill its contractual obligation, you will have to replace whatever it was the counterparty was supposed to deliver (e.g. an interest rate, a stock, a commodity, etc). Of course, there is a good chance that you won't be able to do this at the same price because the market will have moved since the contract was created.


Investment dictionary. . 2012.

Игры ⚽ Поможем сделать НИР

Look at other dictionaries:

  • Risk factors for breast cancer — Risk factors of breast cancer may be divided into preventable and non preventable. Their study belongs in the field of epidemiology. Breast cancer, like other forms of cancer, is considered to result from multiple environmental and hereditary… …   Wikipedia

  • Replacement value — The term replacement cost or replacement value refers to the amount that an entity would have to pay to replace an asset at the present time, according to its current worth. In the insurance industry, replacement cost or replacement cost value is …   Wikipedia

  • Counterparty credit risk —   Risk that the counterparty will fail to meet its obligations under the terms agreed of all contracts resulting in possible replacement costs. Counterparty credit risk is becoming an important factor in the derivatives markets (such as swaps).… …   International financial encyclopaedia

  • Hormone replacement therapy (menopause) — Hormone replacement therapy (HRT) is a system of medical treatment for surgically menopausal, perimenopausal and to a lesser extent postmenopausal women. It is based on the idea that the treatment may prevent discomfort caused by diminished… …   Wikipedia

  • Hormone replacement therapy (male-to-female) — Hormone replacement therapy (HRT) for transgender and transsexual people replaces the hormones naturally occurring in their bodies with those of the other sex. However, not all cases of hormone replacement therapy are used by transgendered people …   Wikipedia

  • Knee replacement — Knee replacement, or knee arthroplasty, is a common surgical procedure most often performed to relieve the pain and disability from degenerative arthritis, most commonly osteoarthritis, but other arthritides as well. [ cite… …   Wikipedia

  • Hormone replacement therapy (female-to-male) — Hormone replacement therapy (HRT) for transgender and transsexual people replaces the hormones naturally occurring in their bodies with those of the other sex. However, not all cases of hormone replacement therapy are used by transgendered people …   Wikipedia

  • Aortic valve replacement — is a cardiac surgery procedure in which a patient s aortic valve is replaced by a different valve. The aortic valve can be affected by a range of diseases; the valve can either become leaky (aortic insufficiency / regurgitation) or partially… …   Wikipedia

  • Bioidentical hormone replacement therapy — (BHRT) is the use of supplemental doses of steroid hormones with a chemical structure identical to endogenous human hormones (hormones naturally produced in the human body). On 1/10/2008 the US Food and Drug Administration sent… …   Wikipedia

  • Percutaneous aortic valve replacement — Intervention ICD 9 CM 35.21 35.22 …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”