B
   
   Black Box
   















 

B

Black Box

(1) A valuation or pricing formula for financial instruments that is not explained to users of the computer system that incorporates the formula. Users are expected to accept the output of the computer 'box' on faith. (2) Any computer system, portfolio, balance sheet, or income statement that is not transparent to its users and which, consequently, demands a high degree of trust in its creators.

Glossary * B