Definitions Starting with "K"

K-Percent Rule

The K-percent rule is a monetary theory that states that the Federal Reserve should grow the money supply by a set amount per year ("K percent"). Economist Milton Friedman developed the theory. Read more

Kaizen

Kaizen is a Japanese philosophy of continuous improvement. Kaizen does not have a set of steps, as it is a philosophy. Read more

Kamikaze Defense

A kamikaze defense is a method for deterring a potential acquirer from purchasing a company. The kamikaze defense is named after the suicide tactics of Japanese pilots during World War II. Read more

Kanban

Kanban is a Japanese term that refers to the  "just-in-time" inventory method's signal to a supplier to send more inventory.   Just in time (JIT) is an inventory management method whereby materials, goods and even labor are scheduled to arrive or be replenished only exactly when needed in the production process. Read more

Kangaroo Bond

Also known as a Matilda bond, a kangaroo bond is a bond issue in the Australian market by a non-Australian company. Let's say Company XYZ is headquartered in San Diego. Read more

Kangaroos

Kangaroos are slang for Australian stocks. For example, if Company XYZ is an Australian company whose stock trades on the Sydney exchange, it is a kangaroo. Read more

Katie Couric Clause

A Katie Couric clause was a proposed provision of SEC executive compensation disclosure rules that would have required public companies to disclose compensation paid to several non-executive employees whose total compensation exceeded that of the most highly paid executive officers. The Katie Couric clause is named after former "Today Show" co-host Katie Couric, who, like many media personalities, receive high compensation but are not company officers. Read more

Keepwell Agreement

A keepwell agreement is a legal agreement between a parent company and a subsidiary to ensure solvency and financial stability for the duration of the agreement. For example, let's assume that Company XYZ is a subsidiary of Company ABC. Read more

Keidanren

Keidanren is the abbreviation for Keizai Dantai Reng?kai or the Japanese Business Federation, which is a Japanese association of businesses. Established in 1946, Keidanren has absorbed and merged with many other organziations over the years. Read more

Keiretsu

Keiretsu is a Japanese term that refers to a small, integrated supplier group. Just in time (JIT) is an inventory management method whereby materials, goods and even labor are scheduled to arrive or be replenished only exactly when needed in the production process. Read more

Keogh Plan

A Keogh Plan is a tax-deferred retirement plan available to self-employed individuals or unincorporated businesses. Congress passed legislation called the Self Employed Individuals Tax Retirement Act of 1962, which established Keogh (pronounced KEY-oh) plans. Read more

Key Currency

A key currency is a currency used to set the exchange rate in an international transaction. Let's say Country A has a tiny economy and an unstable government. Read more

Key Employee

Losing key executives, particularly founders, can be very traumatic for companies. Their talent is usually hard to come by, and their roles are often more than just symbolic—in many cases these executives are the "face" of a company. Read more

Key Money

Key money is money paid to a landlord or property owner in order to reserve a spot as a tenant on the property. Let's say Company XYZ is a restaurant firm that wants to open a location in the new ABC outdoor mall. Read more

Key Performance Indicators (KPI)

Key performance indicators (KPIs) are written goals for companies, departments within companies and often individual employees. Let's say John Doe is the CEO of Company XYZ, and he wants the company to "produce higher-quality products" next year. Read more

Key Person Insurance

Also called key man insurance, key person insurance is insurance on an important executive's life. For example, let's say John Doe discovers a cure for cancer. Read more

Key Rate

A bank or other institution uses the key rate to determine the interest rate on debt. In the United States, there are two key rates: the discount rate and the Fed Funds rate. Read more

Key Rate Duration

Key rate duration is not the same as effective duration. Effective duration is an estimate of a security's sensitivity to a parallel shift in interest rates, meaning that it assumes that interest rates change by the same degree for, say, one-year bonds, five-year bonds, 10-year bonds, and 30-year bonds. Read more

Key Ratio

A key ratio is any financial ratio that is especially important, prevalent, or necessary in analyzing a company's performance in relation to other companies, the industry or the market. Key ratios calculate various pieces of financial data in relation to one another. Read more

Key Reversal

A key reversal is a one-day trading pattern that may signal the reversal of a trend. Other frequently-used names for key reversal include "one-day reversal" and "reversal day. Read more

Keynsian Economics

Keynesian economics is a school of thought named after economist John Maynard Keynes. British economist John Maynard Keynes is one of the fathers of modern macroeconomic theory and is widely considered to be one of the three most important economists of all time, along with Adam Smith and Karl Marx. Read more

Kiasu

Kiasu is a Chinese word that roughly translates to "fear of losing out. " Kiasu can be found in many aspects of daily life. Read more

Kickback

A kickback is a method of bribery in which something of value is exchanged for a favorable decision. A kickback can take many forms, all of which are illegal. Read more

Kicker

In the finance world, a kicker is a feature that makes a security more attractive. Often, kickers are equity kickers, which are the right but not the obligation to buy shares of the issuer of a bond. Read more

Kicking the Tires

Kicking the tires refers to researching multiple aspects of a prospective investment in order to become as familiar as possible with the potential risks and rewards. Derived from the practice of outwardly examining the quality of a car by kicking the front tires, kicking the tires of a potential investment refers to learning as much as possible about it. Read more

Kiddie Tax

Kiddie tax is the colloquial term for certain taxes owed on interest, dividends or other investment income earned by children under 17 years old. Let's say John Doe has a son, Jake Doe, who is 16 years old. Read more

Kidnap Insurance

People who are famous or who work in high-risk areas are the most likely to warrant kidnap insurance. One of the biggest benefits is access to a team of professionals who can assist the family or company in negotiating releases, investigating the matter, and bringing things to a safe conclusion. Read more

Kill

In the trading world, kill refers to half of a fill or kill (FOK) order, which is a client's instruction to his or her broker to either fill an order immediately and completely or cancel the entire order.   Let's assume you want to purchase 1 million shares of Company XYZ at $20 per share. Read more

Killer Application

A killer application is software that induces consumers to buy new hardware. Software for 3-D printers is an example of a killer app. Read more

Killer Bees

Killer bees are people or companies that help other companies avoid takeovers.  The term gets its name from a type of bee that aggressively attacks perceived threats. Read more

Kiting

Kiting is the illegal practice of exploiting settlement delays to transfer unavailable funds from one bank account to another. In the brokerage industry, kiting occurs when a securities firm fails to settle buy and sell orders by the proper settlement deadline. Read more

Knowledge Capital

Knowledge capital, also called intellectual capital, is the intangible asset that represents valuable ideas, methods, processes and other intuitive talents that belong to a company. Some of the most famous capital is knowledge capital: the secret formula for Coca-Cola or the Colonel's chicken, the design behind the next iPhone, the patent for the Chia Pet, the trademark for the Nike "swoosh" or the code for the next "Call of Duty" video game. Read more

Korea Exchange (KRX)

The Korea Exchange (KRX) is the only securities exchange in South Korea. The KRX is headquartered in the city of Busan. Read more

Korean Composite Stock Price Index (KOSPI)

The Korean Composite Stock Price Index (KOSPI) is the main tracking index in South Korea. The KOSPI Index is comprised of 200 of the largest and most liquid issues traded on the Korean Stock Exchange. Read more

KSOP

Because a KSOP is a combination plan, it has features of both ESOPs and 401(k)s. Companies can match contributions and reduce the expenses involved in running separate ESOPs and 401(k)s. Read more