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Q:
 Quadratic Portfolio - in the context of Value-at-Risk, a portfolio whose portfolio mapping function is a quadratic polynomial.

Quadratic Programming - a variant of linear programming whereby the objective function is quadratic rather than linear. For example, in portfolio selection, the variance of the portfolio (which is a quadratic function) may be minimized subject to constraints on the mean return of the portfolio.

Qualifying Facility - a power production facility that qualifies for special treatment under the U.S. Public Utility Regulatory Policies Act (PURPA). A qualifying facility must generate its power using cogeneration, biomass, waste, geothermal energy or renewable resources, such as solar and wind. PURPA prohibits utilities from owning majority interest in qualifying facilities.

Quality Spread - the spread between Treasury securities and non-Treasury securities that are identical in all respects except for quality rating. For example, the difference between yields on Treasuries and the yields on single A-rated industrial bonds. Also referred to as the credit spread.

Quantile - a notion from probability. Generally, the specific value of a variable that divides the distribution into two parts, those values greater than the quantile value and those values that are less. For instance, p percent of the values are less than the pth quantile.

Quantitative Research - the use of advanced mathematical valuation and econometric models to assess potential returns and risks.

Quanto Option - an option in one currency, but which pays out in another. These currency options have a guaranteed exchange rate that enable buyers who like the underlying asset, German bonds for example, but not the assets pricing currency, to arrange to be paid in a different currency for a fee.

Quanto Swap - an interest rate swap in one currency, but which pays out in another based on a fixed exchange rate.

Quartile - of the three quartiles, the first or lower quartile (LQ) of a list is a number (not necessarily a number in the list) such that at least 1/4 of the numbers in the list are no larger than it, and at least 3/4 of the numbers in the list are no smaller than it. The second quartile is the median. The third or upper quartile (UQ) is a number such that at least 3/4 of the entries in the list are no larger than it, and at least 1/4 of the numbers in the list are no smaller than it.

Quick Asset Ratio - refers to the ratio of cash, cash equivalents and accounts receivable relative to the total current liabilities.  Also known as the Acid Test Ratio.  This measure of liquidity is more rigorous than the Current Ratio.


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