Dictionary

The changes of prices of stock are determined by many factors and many of them cannot be anticipated. The estimation of the changes of prices of stock on the basis of economic factors is the basis of fundamental analysis.

The estimation of the changes of stock on the basis of other factors is the subject of technical analysis, which is based only on the records of the results of previous operations in stock.

The analysis is based on the hypothesis that the prices of stock reflect all the factors including psychological factors, which in short-term investments are more important than the factors included into fundamental analysis.

Theories of expectation are the most discussed theories on the temporal structure of interest rates. They consist of several similar theories. What all the theories of expectation have in common is that the investors do not differ in the possession of debentures with various due dates.

According to the theory of increasing premium for liquidity, yields increase with increasing due dates. Investors who do not invest into debentures are averse to risk (i.e. they prefer low volatility of yields).

The prices of long-term debentures have a higher volatility. With long-term debentures, investors require higher yields, by which they compensate the higher risk.

The expected yield of debentures of all due dates during the following period is equal to the risk-free interest rate, i.e. to the yield of debentures with the shortest due date.

According to the theory of monetary substitute, very short-term debentures represent close substitutes of cash. With regard to the risk, many investors limit themselves to purchases of short-term instruments of the money market.

Therefore the prices of the instruments of the money market increase and the corresponding interest rates decrease in comparison with longer due dates.

The theory assumes a large number of investors investing into short-term debentures. Thus as against the issuers, the buyers strongly prefer short-term due dates. This fact increases the prices of debentures and decreases the corresponding interest rates.

According to the theory of preferential behaviour, investors prefer the purchase of debentures of certain due dates, but not only short-term debentures, and when purchasing other debentures they require higher yields.

This theory is practically a combination of the segmentation and of the theory of increasing premium for liquidity. Instead of the permanently preferred short-term due dates, with the theory of increasing premium for liquidity the investors may prefer other due dates depending on their individual investment goals.

Forward interest rates are determined by the market expectation of future interest rates, i.e. the forward interest rates are unbiased assessments of future spot interest rates.

The dependence of interest rates (of the yield until the due date) on the due date of zero coupon bonds in the milieu of perfect financial markets is called a yield curve or temporal structure of interest rates.

yield curve can be upward-sloping, flat, downward-sloping. Most often it is upward-sloping. It means that the longer the due date, the higher the expected yield, and also the higher the "volatility", of the price of the debenture.

Transaction limits define the maximum weekly amount to be spent by the card. Limits are set for 7 days, from Monday to Sunday. The limit is defined in the payment card agreement, separately for ATM cash withdrawals and for point of sale payments. Weekly limits can be changed at any time in MojeBanka, on the Express line, in a KB branch or upon request of the client in accordance with bank requirements.

A supplementary service offered to selected payment cards. Travel insurance provides protection during travels, including for example cover of medical expenses, damage liability insurance and other unpredictable situations. For more information see the product sheet of your payment card or travel insurance conditions.

A traveller’s cheque is a security, which entitles the person printed on it to receive the amounts stated therein upon its presentation for payment, subject to the conditions stipulated by the issuer of the cheque.