Weak form efficiency
One of the different degrees of the efficient market hypothesis (EMH), suggesting that current stock prices reflect and incorporate all relevant historic information. The weak form therefore implies that technical analysis based on such historic information cannot be used to predict future stock prices.

Warehousing
Practice by a bank of taking on inflation supply (e.g. from a private finance initiative [PFI] deal) and keeping this inflation on its books with the expectation of hedging it in the future by entering into an inflation swap with a pension fund.

Warrant
Certificate, attached to a security, entitling holder to buy a specific amount of securities at a specific price. Warrants are valid for a specified period of time which may lapse either before or, in the case of warrants to purchase common stock, on or after the maturity of the debt security. Warrants are usually detachable and may be traded independently of the debt security. Effectively warrants are long-term call options.

Weighted average cost of capital (WACC)
Calculation of a firm’s overall cost of capital that weights each source of finance proportionately (i.e. equity and debt).

Weighted average return
Rate of return that is weighted to take into account the relative sizes of the various assets or funds which make up the sample.

Weighting
Proportion of an index or portfolio made up of an individual or group of items, usually expressed as a percentage — for example, the percentage of a portfolio invested in a region or any one stock.

White knight
Friendly potential bidder for a company usually sought out as an alternative to a hostile bidder.

Widow and orphan stock
Safe stock considered suitable for highly risk-averse investors.

Wilshire 5000 Index
Total market index measuring the performance of all US-headquartered equity securities with readily available price data. It is the most comprehensive index for the US equity market.

Wind-up
Process by which a company ceases to operate as a going concern, and its assets and property are liquidated in order to repay creditors.

Withholding tax
Tax levied by overseas governments on dividends paid abroad. This may not be reclaimable, even by tax-exempt investors.

With-profits fund
Investment product usually issued by an insurance company, which pays bonuses to policyholders from the profits made on the underlying investments. Policyholders may receive bonuses regularly and/or on maturity. The underlying assets of the with-profits fund usually include equities, bonds and property.

WM company
One of the main service providers in the UK that independently analyses the performance of pension funds and their investment managers.

WM Performance Services
One of the main service providers in the UK that independently analyses the performance of pension funds and their investment managers. Part of the State Street group of companies.
World Trade Organisation Supranational body established to encourage and supervise international trade between member nations.

Writer
Organisation or individual who sells (or grants) an option.

Write-down
Investment which has been valued significantly below its original cost, but which is likely to recover at least part of its cost.

Write-off
Investment from which there is no likelihood of any recovery of the amount invested.

W-shaped recovery
Describes the change of an economic indicator, such as unemployment or GDP, during a recession when the indicator experiences a sharp decline, followed by a rally back to original levels, and then a fall in value followed by another sharp rise.

Warehouse Receipt
Document guaranteeing the existence and availability of a given quantity and quality of a commodity in storage; commonly used as the instrument of transfer of ownership in both cash and futures transactions.

Wire House
See Futures Commission Merchant (FCM).

Writer
See Option Seller.

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