Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
8 Cards in this Set
- Front
- Back
|
Risk premium
|
The excess return required from an investment in a risky asset over that required from a risk-free investment.
|
|
|
Variance
|
The average squared difference between the actual return and the average return.
|
|
|
Standard deviation
|
The positive square root of the variance.
|
|
|
Normal distribution
|
A symmetric, bell-shaped frequency distribution that is completely defined by its mean and standard deviation.
|
|
|
Geometric average return
|
The average compound return earned per year over a multiyear period.
|
|
|
Arithmetic average return
|
The return earned in an average year over a multiyear period.
|
|
|
Efficient capital market
|
A market in which security prices reflect available information.
|
|
|
Efficient market hypothesis (EMH)
|
The hypothesis that actual capital markets, such as the NYSE, are efficient.
|
