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;
25 Cards in this Set
- Front
- Back
|
Dividend yield
|
The amount of dividends received per share of stock owned, expressed as a percentage of the value of the investment at the beginning of the period.
|
|
|
Percentage gain
|
The capital gain or loss based on the change in the valu of the investment from the beginning of the year to the end of the year expressed as a percentage of the value of the investment at the beginning of the period.
|
|
|
Percentage total return
|
The total of the dividend received and the capital gain for the period expressed as a percentage of the value of the investment at the beginning of the period.
|
|
|
Market index
|
A statistic reflecting the composit value of a selection of securities.
|
|
|
Market risk or systematic risk
|
Risk that is common to the overall market or a specific market segment and that therefore cannot be eliminated by diversification.
|
|
|
Company-specific risk or unsystematic risk
|
Risk that affects a specific company of a small group of companies.
|
|
|
Credit risk
|
The risk that a debtor will not repary the amount owed.
|
|
|
Liquidity risk
|
The risk that an asset cannot be sold on short notice without incurring a loss.
|
|
|
Variance
|
A measure of the deviation from the mean of each variable in a data set.
|
|
|
Standard deviation
|
The average of the differences (deviations) between the values in a distribution and the expected value (or mean) of that distribution.
|
|
|
Coefficient of variation
|
A distribution's standard deviation divided by its mean or expected value.
|
|
|
Value at risk
|
A measure of potential dollar losses from an unlikely adverse event affecting an investment portfolio in an otherwise normal market environment
|
|
|
Portfolio optimization
|
In the case of stocks, the arrangement of a stock portfolio so that risks are minimized and rates of return are maximized
|
|
|
Risk-return trade-off
|
The tendency for the potential return to increase ad risk increases
|
|
|
Diversification
|
In the context of an investment portfolio, the process of reducing a portfolio's company-specifoc risk by investing in an array of financial assets
|
|
|
Correlation coefficient
|
A statiscal measure, ranging from +1 to -1, indicating the degree to which two variables' movements are associated
|
|
|
Beta
|
A measure of a stock's volatility relative to that of the market
|
|
|
Risk premium
|
The amount of compensation in excess of the risk-free return needed to induce an investor to accept a risk
|
|
|
Efficent frontier
|
The collection of securities portfolio combinations that generate the highest expected return for a given level of risk or that have the lowest risk for a given expected return
|
|
|
Capital asset pricing model (CAPM)
|
A method of pricing securities based on the relationship between risk and return
|
|
|
Security market line (SML)
|
The relationship between expected return and beta.
|
|
|
Cash matching
|
The process of precisely matching the maturity value of an investment with the amount of expected loss payment
|
|
|
Reinvestment risk
|
The uncertainty about the rate at which periodic interest payments can be reinvested over the life of an investment
|
|
|
Duration
|
In the context of bonds, a measure of the number of years required to recover the true cost of a bond, considering the present value of all coupon and principal payments to be received in the future
|
|
|
Portfolio immunization
|
The process of matching investment and liabilty duration.
|
