Synchronous data
Data available at the same time. In testing option-pricing models, the price of the
option and of the underlying should be synchronous, representing the same
moment in the market.
Syndicate
A group of banks that acts jointly, on a temporary basis, to loan money in a bank
credit (syndicated credit) or to underwrite a new issue of bonds.
Synergistic effect
A violation of value-additivity whereby the value of the combination is greater
than the sum of the individual values.
Synthetic convertible
Mainly applies to convertible securities. Combination of usable bonds and
warrants (that expire on or after bonds maturity) that resemble the characteristics
of a convertible bond.
Synthetics
Customized hybrid instruments created by blending an underlying price on a
cash instrument with the price of a derivative instrument. It is a combination of
security holdings which mimics the price movement of another, single security
(i.e., synthetic call: long position in a stock combined with a put on that position; a
protected long sale; synthetic put: short position in a stock combined with a call
on that position; a protected short sale).
Systematic
Common to all businesses.
Systematic risk
Also called undiversifiable risk or market risk.
Systematic risk principle
Only the systematic portion of risk matters in large, well-diversified portfolios.
The, expected returns must be related only to systematic risks.
