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58 Cards in this Set
- Front
- Back
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Capital Asset Pricing Model (CAPM) |
method of calculating expected return based on the riskless rate, expected market return, and beta. Based on idea that equity investors expect the time value of money plus a risk premium to compensate for the risk taken by investing in the stock market. |
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Modern Portfolio Theory |
investment approach using optimal portfolios to maximize returns for a given level of risk. Based on belief that uncorrelated investments can reduce the overall risk of a portfolio
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portfolio optimization |
using the efficient frontier to match an investor's risk tolerance and objectives with the most efficient portfolio possible on a risk-adjusted basis
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efficient frontier |
graph showing expected return on the vertical axis and standard deviation on the horizontal axis, with a curve known as the efficient frontier upon whose line optimal portfolios are constructed to balance maximum returns with any risk taken. Portfolios behind the line
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efficient market hypothesis |
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weak form |
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semi-strong form |
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strong form |
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marginal tax rate |
the highest rate at which you pay tax on your taxable income |
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ordinary income
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qualified dividends
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ordinary dividends |
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alternative minimum tax (AMT) |
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private activity bonds |
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capital gains |
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proceeds
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what you sell it for |
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cost basis |
what you paid for it
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First in first out (FIFO)
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CUSIP number
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share identification |
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average cost |
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short-term capital gains rate |
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holding period
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capital loss |
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bond swap |
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unrealized capital gain |
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1099-DIV |
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capital gains distribution |
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unrealized capital gain |
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estate |
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cash value |
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random withdrawal |
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cost basis |
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short-term capital gain |
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short-term capital loss |
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legal person |
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gift |
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gift splitting |
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intestate |
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grantor trusts |
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simple trust |
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corpus |
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complex trust |
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inter vivos |
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testamentary trust |
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split trust |
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charitable remainder trusts |
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charitable lead trusts |
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totten trust |
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crummey trust |
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fiduciary |
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Uniform Prudent Investor Act |
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Progressive taxes |
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Regressive tax |
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earned income |
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ordinary income |
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passive income |
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portfolio income |
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