ABX index

Definition:

Index created by the firm Markit. It is based on the price of credit default swaps on the index's constituent mortgage backed securities. A decline in the the ABX Index indicates that the market associates more risk with subprime mortgages.

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Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Risk-averse

Describes an investor who, when faced with two investments with the same expected return but different risks, prefers the one with the lower risk.

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