Underfunded pension plan
A pension plan that has a negative surplus (i.e., liabilities exceed assets).
The "something" that the parties agree to exchange in a derivative contract.
Underwriting income
For an insurance company, the difference between the premiums earned and the costs of settling claims.
Undiversifiable risk
Related: Systematic risk
Universal life
A whole life insurance product whose investment component pays a competitive interest rate rather than the below-market crediting rate.
Unsystematic risk
Also called the diversifiable risk, residual risk, or company-specific risk, the risk that is unique to a company such as a strike, the outcome of unfavorable litigation, or a natural catastrophe. Related: Systematic risk
Upstairs market
A network of trading desks for the major brokerage firms and institutional investors that communicate with each other by means of electronic display systems and telephones to facilitate block trades and program trades.
Uptick trade
Related: Tick-test rules
Utility function
A mathematical expression that assigns a value to all possible choices. In portfolio theory the utility function expresses the preferences of economic entities with respect to perceived risk and expected return.

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