Financial Definitions Starting with "K"

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...

Kaizen is a Japanese philosophy of continuous improvement. Kaizen does not have a set of steps, as it is a philosophy. The idea is that the status quo is not sufficient. Accordingly, compan...

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. Let's say ...

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...

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. It specializes in research ...

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. Kangaroos are a popular f...

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...

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 Co...

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 wit...

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 ...

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...

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. As a result, the value of its curren...

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 ...

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...

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 comp...

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. All the trials show that his ne...

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. To understand key rates,...

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 ...

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 ratio...

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."Dependin...

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 consider...

Kiasu can be good and bad. It can encourage people to persevere and create amazing results; it can also waste time and energy. In the investing world, it can create an irrational fear of losing. Kias...

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.  For example, a building contractor...

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....

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 outwar...

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...

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 comp...

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 entir...

Killer applications kill the competition and are so novel that they require an entirely new platform to work. They can be incredibly lucrative, especially if patented, though often they spawn knock-of...

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. Let's assume that ...

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 fail...

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 ...

The Korea Exchange (KRX) is the only securities exchange in South Korea. The KRX is headquartered in the city of Busan.The Korea Exchange is a consolidation of the Korean Stock Exchange, the KOSDAQ st...

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 Excha...

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. KSOPs also in...