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Glossary

U

UBO
Ultimate Beneficial Owners
UCITS
Undertakings for Collective Investments in Transferable Securities (EU equivalent of Mutual Funds)
Unbiasedness
Lack of bias. A desirable property of estimators; an unbiased estimator is one whose expected value (the mean of its sampling distribution) equals the parameter it is intended to estimate.
Unbilled revenue
Revenue that has been earned but not yet billed to customers as of the end of an accounting period.  Synonyms: accrued revenue
Unclassified balance sheet
A balance sheet that does not show subtotals for current assets and current liabilities.
Unconditional heteroskedasticity
Heteroskedasticity of the error term that is not correlated with the values of the independent variable(s) in the regression.
Unconditional probability
The probability of an event not conditioned on another event. Synonyms: marginal probability
Unconstrained optimization 
Optimization that places no constraints on asset class weights except that they sum to 1. May produce negative asset weights, which implies borrowing or shorting of assets.
Undated issue
A floating-rate note with no stated maturity date (see also "perpetual floating-rate note").
Underfunded plan
A pension plan in which the ratio of the value of plan assets to the present value of plan liabilities is less than 100 percent.
Underlying
An asset that trades in a market in which buyers and sellers meet, decide on a price, and the seller then delivers the asset to the buyer and receives payment. The underlying is the asset or other derivative on which a particular derivative is based. The market for the underlying is also referred to as the spot market.
Underlying earnings
Earnings excluding nonrecurring components. Synonyms: persistent earnings continuing earnings core earnings
Underwrite
The purchase of a bond or note issue from an issuer to resell it to investors.
Underwriter
The securities dealer who purchases a bond or note issue from an issuer and resells it to investors. If a syndicate or selling group is formed, the underwriter who coordinates the financing and runs the group is called the senior or lead manager. The difference between the offering price to the public by the underwriter and the purchase price the underwriter pays to the issuer. The underwriter’s expenses and selling costs are usually paid from this amount.
Underwriting cycle
A cycle affecting the profitability of insurance companies’ underwriting operations.
Synonyms: profitability cycle
Undisclosed limit order
A limit order that includes an instruction not to show more than some maximum quantity of the unfilled order to the public at any one time.
Undivided account
Syndicate account structure that is undivided as to sales and liability. Also called “Eastern” account.
Unearned fees
Unearned fees are recognized when a company receives cash payment for fees prior to earning them.
Unearned revenue
A liability account for money that has been collected for goods or services that have not yet been delivered; payment received in advance of providing a good or service.
Unexpected earnings
The difference between reported earnings per share and expected earnings per share.  Synonyms: earnings surprise
Unhedged return 
A foreign asset return stated in terms of the investor’s home currency.
Unit
A fractional, undivided interest in a unit investment trust.
Unit investment trust
An investment fund created with a fixed portfolio of investments to provide a steady, periodic flow of income to investors.
Unlimited funds
An unlimited funds environment assumes that the company can raise the funds it wants for all profitable projects simply by paying the required rate of return.
Unlimited tax bond
A bond secured by the pledge of taxes that are not limited by rate or amount.
Unidentifiable intangible
An intangible that cannot be acquired singly and that typically possesses an indefinite benefit period; an example is accounting goodwill.
Unique circumstances
Internal factors (other than a liquidity requirement, time horizon, or tax concern) that may constrain portfolio choices.
Unit root
A time series that is not covariance stationary is said to have a unit root.
Uniting of interests method
A method of accounting in which combined companies were portrayed as if they had always operated as a single economic entity. Called pooling of interests under U.S. GAAP and uniting of interests under IFRS. (No longer allowed under U.S. GAAP or IFRS.)
Units-of-production method
A depreciation method that allocates the cost of a long-lived asset based on actual usage during the period.
Univariate distribution
A distribution that specifies the probabilities for a single random variable.
Universal life insurance 
A type of life insurance policy that provides for premium flexibility, an adjustable face amount of death benefits, and current market interest rates on the savings element.
Undivided account
Syndicate account structure that is undivided as to sales and liability. Also called “Eastern” account.
Unit
A fractional, undivided interest in a unit investment trust.
Unit investment trust
An investment fund created with a fixed portfolio of investments to provide a steady, periodic flow of income to investors.
Unlimited funds
An unlimited funds environment assumes that the company can raise the funds it wants for all profitable projects simply by paying the required rate of return.
Unlimited tax bond
A bond secured by the pledge of taxes that are not limited by rate or amount.
Unrelated business income 
With respect to the U.S. tax code, income that is not substantially related to a foundation’s charitable purposes.
Unsecured debt
Debt with a claim for repayment that ranks last after all other forms of debt securities in the event of a corporate liquidation.
Up transition probability
The probability that an asset’s value moves up.
Upstream
A transaction between two affiliates—an investor company and an associate company—such that the associate company records a profit on its income statement. An example is a sale of inventory by the associate to the investor company.
Unstructured modeling 
Modeling without a theory on the underlying structure.
Uptick rules 
Trading rules that specify that a short sale must not be on a downtick relative to the last trade at a different price.
Urgency of the trade 
The importance of certainty of execution.
U.S. Savings Bond
U.S. Savings Bond A non-marketable bond issued by the U.S. Treasury in face value denominations designed for individual investors. Since savings bonds are direct obligations of the U.S. Government, the credit quality is the highest available. Each bond is a registered security for which a record is maintained by the Bureau of the Public Debt. Interest from savings bonds are exempt from state and local taxes, and unlike most investments no federal tax is due until the bond is redeemed. Two categories of bonds are currently available for purchase-Series EE and series I. For more information on purchasing savings bonds go to www.treasurydirect.gov.
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