an options contract, the risk to the optionbuyer that the option writer will not buy or sell the underlying as agreed. Counterpurchase Exchange of goods between two parties under two distinct contracts expressed in monetary terms. Countertrade See: barter Country allocations The percentages of a fund's net assetsdistributed to securities of various countries. These percentages serve as an indicator of a fund's diversification and its vulnerability to fluctuations in foreign financial markets or currencyexchange rates. Country beta Covariance of a national economy's rate of return and the rate of return of the world economy divided by the variance of the world economy. Country diversification Investment of a global or international portfolio'sassets in securities of various countries. Country economic risk Developments in a national economy that can affect the outcome of an international financial transaction. Country financial risk Centers around the ability of a national economy to generate enough foreign exchange to meet payments of interest and principal on its foreign debt. Country risk The general level of political, financial, and economic uncertainty in a country which impacts the value of the country's bonds and equities. See:Sovereign risk. Country selection A type of active international management that measures the contribution to performance attributable to investing in the better-performing stock markets of the world. Coupon The contractual interest obligation a bond or debenture issuer covenants to pay to its debtholders. Coupon bond A bond featuring coupons that must be presented to the issuer in order to receive interest payments. Coupon-equivalent rate See: Equivalent bond yield Coupon equivalent yield True interestcost expressed on the basis of a 365-day year. Coupon pass Canvassing by the desk of primary dealers to determine the inventory and maturities of their Treasury securities. The desk then decides whether to buy or sell certain issues (coupons) in order to add or withdraw reserves. Coupon payments A bond'sinterest payments. Coupon rate In bonds, notes, or other fixed income securities, the stated percentage rate of interest, usually paid twice a year. Covariance A statistical measure of the degree to which random variables move together. A positive covariance implies that one variable is above (below) its mean value when the other variable is above (below) its mean value. Covenant An agreed action to be undertaken (Positive) or not done (Negative). A breach of a covenant is a default. Cover The amount above UNITY of a debt service ratio. Coverage See: Fixed-charge coverage Coverage initiated Usually refers to the fact that analysts begin following a particular security. This usually happens when there is enough trading in it to warrant attention by the investment community. Coverage ratios Ratios used to test the adequacy of cash flows generated through earnings for purposes of meeting debt and leaseobligations, including the interest coverage ratio and the fixed-charge coverage ratio. Covered A written option is considered to be covered if the writer also has an opposing market position on a share-for-share basis in the underlying security. That is, a short call is covered if the underlying stock is owned, and a short put is covered (for margin purposes) if the