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  • Under the conflict of interest statute, 18 U.S.C. § 208, a waiver permits an employee to participate in specified Government matters which would otherwise conflict with private financial interests. Section 208(b)(1) and (b)(3) of the statute details the conditions under which a waiver may be granted. It must be issued in writing by the employee's appointing official or delegate. (The statute also provides, in section 208(b)(2), for exemptions by OGE regulation, for certain remote or inconsequential financial interests common to a large number of employees.)

    US Army Financial Disclosure Management - Cite This Source - This Definition

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  • Corporations may issue warrants that allow you to buy a company's stock at a fixed price during a specific period of time, often 10 or 15 years, though sometimes there is no expiration date.

    Warrants are generally issued as an incentive to investors to accept bonds or preferred stocks that will be paying a lower rate of interest or dividends than would otherwise be paid.

    How attractive the warrants are - and so how effective they are as an incentive to purchase - generally depends on the growth potential of the issuing company. The brighter the outlook, the more attractive the warrant becomes.

    When a warrant is issued, the exercise price is above the current market price. For example, a warrant on a stock currently trading at $15 a share might guarantee you the right to buy the stock at $30 a share within the next 10 years. If the price goes above $30, you can exercise, or use, your warrant to purchase the stock, and either hold it in your portfolio or resell at a profit. If the price of the stock falls over the life of the warrant, however, the warrant becomes worthless.

    Warrants are listed with a "wt" following the stock symbol and traded independently of the underlying stock. For example, if you own warrants to purchase a stock at $30 a share that is currently trading for $40 a share, your warrants would theoretically be worth a minimum of $10 a share, or their intrinsic value.

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  • A weather derivative is a futures contract - or options on that futures contract - where the underlying commodity is a weather index.

    These derivatives work much the same way that interest-rate or stock index futures and options do, by creating a tradable commodity out of something that is relatively intangible.

    Analysts look at historical weather patterns - temperature, rainfall and other things - develop averages, and quantify the risk that weather will deviate from the average.

    Corporations use weather derivatives to hedge their risk that bad weather will cause a financial loss. For a cereal company, bad weather might be a drought, which would cause wheat prices to go up. For a home heating company, it could be warm days in November, which could lower demand for home heating oil. And for an amusement park it could be rain.

    The cereal company and the amusement park might buy futures contracts with an underlying weather index based on rainfall. The home heating company might want contracts based on a temperature index.

    Weather derivatives are different from insurance, because they're linked to common weather events, like dry seasons, or a warm autumn, that affect particular businesses.

    Insurance is still required to protect against major weather events, like tornadoes, hurricanes, and floods.

    You can buy weather derivatives as an individual, but you'll want to consider the trading costs carefully to ensure that your risk of loss is worth the expense.

  • Browse Related Terms: Cash settlement, Clearinghouse, Closing price, Commodity, Daily trading limit, derivative, Financial future, Fungible, Futures contract, Go long, Hedger, Open interest, Speculator, Trade date, Trading volume, Unit of trading, Weather derivative, Zero sum

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