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Financial Glossary

J-curve

Theory that says a country's trade deficit will initially worsen after its currency depreciates because higher prices on foreign imports will more than offset the reduced volume of imports in the short-run.

Jensen index

An index that uses the capital asset pricing model to determine whether a money manager outperformed a market index. The ``alpha'' of an investment or investment manager.

Joint account

An agreement between two or more firms to share risk and financing responsibility in purchasing or underwriting securities.

Joint clearing members

Firms that clear on more than one exchange.

Jumbo loan

Loans of $1 billion or more. Or, loans that exceed the statutory size limit eligible for purchase or securitization by the federal agencies.

Junior debt (subordinate debt)

Debt whose holders have a claim on the firm's assets only after senior debtholder's claims have been satisfied. Subordinated debt.

Junk bond

A bond with a speculative credit rating of BB (S&P) or Ba (Moody's) or lower is a junk or high yield bond. Such bonds offer investors higher yields than bonds of financially sound companies. Two agencies, Standard & Poors and Moody's investor Services, provide the rating systems for companies' credit.

Just-in-time inventory systems

Systems that schedule materialsinventory to arrive exactly as they are needed in the production process.