Novation
Novation is the transfer of the rights and obligations of one party in a contract to a new party who steps into the contract.
The party giving up the rights and obligations steps out of the contract.
This transfer can only take place with the agreement of all parties.
The three involved parties are called: transferor, transferee and remaining party.b
Value at Risk (VaR)
The VaR measures the probability of a certain loss over a given time period.
Common stated probabilities are 1 and 5 %, common time periods are a day and two weeks.
For example, a one-day 5% VaR of $1 million means that there is a 5% chance to loose $1 million within a day.