Tax-free reorganizations: Types of business combinations in which shareholders do not incur tax liabilities. There are four types-A, B, C, and D reorganizations. They differ in various ways in the amount of stock/cash that can be offered. See Internal Revenue Code Section 368.
Time Value of Money: The basic principle that money can earn interest, therefore something that is worth $1 today will be worth more in the future if invested. This is also referred to as future value.
Total Return Swap - Any swap in which the non-floating rate side is based on the total return of an equity or fixed income instrument with a life longer than the swap. Total return swaps are most common in equity or physical commodity markets, but they can be used in fixed income markets where the non-domestic holder of a fixed income security would be subject to a withholding tax, but where the withholding tax may be avoided if the debt instrument is held by a domestic investor who pays the total return to a foreign investor by way of a total return swap. Total return swaps are also used to transfer credit exposure.
Tracking-Error - Tracking Error is measured by taking the square root of the average of the squared deviations between the investment's returns and the benchmark's returns. It indicates the degree to which a manager deviates from index returns. A tracking error of 2% or less tends to indicate that the portfolio will perform similar to the index. A tracking error of 3% or higher, indicating that the portfolio deviates considerably (either favorably or unfavorably) from its benchmark index, is considered to be more actively managed.
Transparency: The literal meaning of transparency is the state of being easily detected or seen through, readily understood, or free from pretense or deceit. Transparency in this sense refers to the ability of the investor to look through a hedge fund to its investment portfolio to determine compliance with the fund's investment guidelines and risk parameters, by examining a portfolio's positions.
Treasury Stock: Stock issued by a company but later reacquired. It may be held in the company's treasury indefinitely, reissued to the public, or retired. Treasury stock receives no dividends and does not carry voting power while held by the company.