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12 Cards in this Set
- Front
- Back
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Risk-On Risk-Off
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Risk-on risk-off is an investment setting in which price behavior responds to, and is driven by, changes in investor risk tolerance. Risk-on risk-off refers to changes in investment activity in response to global economic patterns. |
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Risk Asset |
A risk asset is any asset that carries a degree of risk. Risk asset generally refers to assets that have a significant degree of price volatility, such as equities, commodities, high-yield bonds, real estate and currencies. |
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Real Asset |
Physical or tangible assets that have value, due to their substance and properties. Real assets include precious metals, commodities, real estate, agricultural land and oil. They are appropriate for inclusion in most diversified portfolios - with their proportion dependent on the investor's risk tolerance and preferences - because of their relatively low correlation with financial assets , such as stocks and bonds. They are particularly well-suited for inflationary times, because of their tendency to outperform financial assets during such periods. |
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Defensive Buy |
Securities or investments that are perceived as being lower risk by virtue of their lower exposure to economic cycles |
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Equity Market |
The market in which shares are issued and traded, either through exchanges or over-the-counter markets. Also known as the stock market. |
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Current Yield |
Annual income (interest or dividends) divided by the current price of the security. This measure looks at the current price of a bond instead of its face value and represents the return an investor would expect if he or she purchased the bond and held it for a year. |
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Nominal Yield |
A nominal yield is the coupon rate on a bond. The nominal yield is the interest rate (to par value) that the bond issuer promises to pay bond purchasers. This rate is fixed and applies to the life of the bond. Nominal yield is sometimes referred to as nominal rate, coupon yield or coupon rate. |
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Maintenance Margin |
A maintenance margin is the minimum amount of equity that must be maintained in a margin account. |
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Initial Margin |
Initial margin is the percentage of the purchase price of securities (that can be purchased on margin) that the investor must pay for with his or her own cash or marginable securities.Also called the "initital margin requirement." ex. [Total price you want to buy] * IM = Amount you have to pay |
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Return on Equity (ROE) |
The amount of Net Income returned as a percentage. Measures a corporations profitability for every dollar invested by the shareholders. ROE = (Net Income/Shareholders Equity) |
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Debt/Equity Ratio (D/E Ratio) |
D/E is a debt ratio used to measure a company's financial leverage. Indicates how much debt a company is using to finance its assets relative to the amount of value represented in shareholders equity. D/E = Total Liabilities/Shareholders equity D/E = Total Liabilities/(Total Assets - Total Liabilities) |
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Earnings Per Share (EPS) |
Portion of the companies profit allocated to each outstanding share. Serves as an indicator for profitability. Net Income - Pref. Dividends / Avg Outstanding Shares |
