Term
|
Definition
| factual data on the past behavior of the economy, the market, the industry, the company, or a given investment vechicle. |
|
|
Term
|
Definition
| available current data in conjunction with projections and recommendations about potential investments. |
|
|
Term
|
Definition
| (regulation FD) rule requiring senior executives to disclose critical information simultaneously to investment professionals and the public via press releases or SEC filings |
|
|
Term
| stockholder's (annual) report |
|
Definition
| a report published yearly by a publicly held corporation; contains a wide range of information, including financial statements for the most recent perios of operation. |
|
|
Term
|
Definition
| a statement that must be filed annually with the SEC by all firms having securities listed on a securities exchange or traded in the OTC market |
|
|
Term
| Standard & Poor's Corporation (S&P) |
|
Definition
| publisher of a large number of financial reports and services; including Corporation Records and Stock Reports |
|
|
Term
|
Definition
| publisher of a variety of financial material, including Mergent's Manuals |
|
|
Term
| Value Line Investment Survey |
|
Definition
| one of the most popular subscription services used by individual investors; subscribers receive three basic reports weekly. |
|
|
Term
| back-office research reports |
|
Definition
| a brokerage firm's analyses of and recommendations on investment prospects; available on request at no cost to existing and potential clients or for purchase at some Web sites. |
|
|
Term
|
Definition
| newsletters that provide, on a subscription basis, the analyses, conclusions, and recommendations of experts in securities investment. |
|
|
Term
|
Definition
| price information about various types of securities including current price data and statistics on recent price behavior. |
|
|
Term
|
Definition
| supersites on the Web that bring together a wide reand of investing features, such as realtime quotes, stock and mutual fund screens, portfolio trackers, new, research, and transaction capabilities, along with other personal finance features. |
|
|
Term
|
Definition
| numbers used to measure the general behavior of stock prices by reflecting the arithmetic average price behavior of a representative group of stocks at a given point in time |
|
|
Term
|
Definition
| numbers used to measure the general behavior of stock prices by measuring the current price behavior of a representative group of stocks in relation to a base value set at an earlier point in time |
|
|
Term
| Dow Jones Industrial Average (DJIA) |
|
Definition
| a stock market average made up of 30 high-quality socks selected for total market value and broad public ownership and believed to reflect overall market activity. |
|
|
Term
| Value Line composite index |
|
Definition
| stock index that reflects the percentage change in share price of about 1,700 stocks, relative to a base of 100 set at June 30, 1961 |
|
|
Term
|
Definition
| summary measure of the total return an investor would receive on a bond if it were purchased at its current price and held to maturity; reported as an annual rate of return. |
|
|
Term
| Dow Jones Corporate Bond Index |
|
Definition
| mathematical averages of the closing prices for 96 bonds--32 industrial, 32 financial, adn 32 utility/telecom. |
|
|
Term
|
Definition
| individuals licensed by both the SEC and the securities exchanges to facilitate transactions between buyers and sellers of securities. |
|
|
Term
|
Definition
| security certificates issued in teh brokerage firm's name but held in trust for its client, who actually owns them. |
|
|
Term
|
Definition
| broker who, in addition to executing clients' transactions, provides them with a full array of brokerage services. |
|
|
Term
|
Definition
| broker who charges low commissions to make transactions for customers but provides limited free research information and investment advice. |
|
|
Term
|
Definition
| typically a deep-descount broker through which investors can execute trades electronically online via a commercial service, on the Internet, or by phone. |
|
|
Term
|
Definition
| an illegal and unethical practice engaged in by a broker to increase commissions by causing excessive trading of client's accounts. |
|
|
Term
|
Definition
| the brokerage account of a minor; requires a parent or guardian to be part of all transactions. |
|
|
Term
|
Definition
| a brokerage account in which a customer can make only cash transactions |
|
|
Term
|
Definition
| a brokerage account in which the customer has been extended borrowing privileges by the brokerage firm. |
|
|
Term
|
Definition
| a brokerage account in which customers with large portfolios pay a flat annual fee that covers the cost of a money manager's services and the commissions on all trades |
|
|
Term
|
Definition
| less than 100 shares of stock |
|
|
Term
|
Definition
| 100-share units of stock or multiples thereof |
|
|
Term
|
Definition
| an order to buy or sell stock at the best price avaliable when the order is placed. |
|
|
Term
|
Definition
| an order to buy at or below a specified price or to sell at or above a specified price. |
|
|
Term
|
Definition
| an order to sell a stock when its market price reaches or drops below a specified level; can also be used to buy stock when its market price reaches or rises above a specified level. |
|
|
Term
|
Definition
| an investor who buys and sells stocks quickly throughout the day in hopes of making quick profits. |
|
|
Term
| fixed-commission schedules |
|
Definition
| fixed brokerage commissions that typically apply to the small transactions usually made by individual investors. |
|
|
Term
|
Definition
| brokerage commissions agreed to by the client and teh broker as a result of their negotiations; typically apply on large instiutional transactions and to individual investors who maintain large accounts. |
|
|
Term
| Securities Investor Protection Corporation (SIPC) |
|
Definition
| a nonprofit membership corporation, authorized by the federal government, that insures each brokerage customer's account for up to $500,000, wth claims for cash limited to $100,000 per customer. |
|
|
Term
|
Definition
| an informal, voluntary dispute-resolution process in which a client adn broker agree to a mediator, who facilitates negotiations between them to resolve the case. |
|
|
Term
|
Definition
| a formal dispute-resolution process in which a client and a broker present their argument before a panel, which then decides the case. |
|
|
Term
|
Definition
| individuals or firms that provide investment advice, typically for a fee. |
|
|
Term
|
Definition
| a legal partnership through which a group of investors are bound to a specified organizational structure, operating procedures, and purpose, which is typically to earn favorable long-term returns from moderate-risk investments. |
|
|
Term
|
Definition
| the level of profit from an investment--that is, the reward for investing |
|
|
Term
|
Definition
| usually cash or near-cash that is periodically received as a result of owning an investment |
|
|
Term
|
Definition
| the sum of the current income and the capital gain (or loss) earned on an investment over a specified period of time. |
|
|
Term
|
Definition
| the return an investor thinks an investment will earn in the future. |
|
|
Term
|
Definition
| a period of generally rising prices |
|
|
Term
|
Definition
| a period of generally declining prices |
|
|
Term
|
Definition
| an investment whose present value of benefits (discounted at the appropriate rate) equals or exceed the present value of its costs |
|
|
Term
|
Definition
| the rate of return an investor must earn on an investment to be fully compensated for its risk |
|
|
Term
|
Definition
| the real rate of return that could be earned in a perfect world where all outcomes are known and certain--where there is no risk |
|
|
Term
| expected inflation premium |
|
Definition
| the average rate of inflation expected in the future |
|
|
Term
|
Definition
| the rate of return that can be earned on a risk-free investment; the sum of the real rate of return and the expected inflation premium. |
|
|
Term
|
Definition
| a return premium that reflects the issue and issuer characteristics associated with a given investment vehicle. |
|
|
Term
|
Definition
| the period of time over which one wishes to measure the return on an investment vehicle. |
|
|
Term
|
Definition
| current income actually received by an investor during a given period. |
|
|
Term
|
Definition
| a return that has been achieved but not yet realized by an investor during a given period. |
|
|
Term
| holding period return (HPR) |
|
Definition
| the total return earned from holding an investment for a specified holding period (usually one year or less). |
|
|
Term
| yield (internal rate of return) |
|
Definition
| the compound annual rate of return earned by a long-term investment; the discount rate that produces a present value of the investment's benefits that just equals its cost. |
|
|
Term
|
Definition
| the rate of return earned on interest or other income received from an investment over its investment horizon |
|
|
Term
| fully compounded rate of return |
|
Definition
| the rate of return that includes interest earned on interest. |
|
|
Term
|
Definition
| the compound annual rate of change in the value of a stream of income. |
|
|
Term
|
Definition
| the chance that the actual return from an investment may differ from what is expected. |
|
|
Term
|
Definition
| the relationship between risk and return, in which investments with more risk should provide higher returns, and vice versa. |
|
|
Term
|
Definition
| the degree of uncertainty associated with an investment's earnings and the investment's ability to pay the returns owed investors. |
|
|
Term
|
Definition
| the degree of uncertainty of payment resulting from a firm's mix of debt adn equity; the larger the proportion of debt financing, the greater the risk. |
|
|
Term
|
Definition
| the chance that changing price levels (inflation or deflation) will adversely affect investment returns. |
|
|
Term
|
Definition
| the chance that changes in interest rates will adversely affect a security's value. |
|
|
Term
|
Definition
| the risk of not being able to liquidate an investment conveniently and at a reasonable price. |
|
|
Term
|
Definition
| the chance that Congress will make unfavorable changes in tax laws, driving down the after-tax returns and market values of certain investments. |
|
|
Term
|
Definition
| risk of decline in investment returns because of market factors independent of given investment. |
|
|
Term
|
Definition
| risk that comes from an unexpected even that has a significant and usually immediate effect on the underlying value of an investment. |
|
|
Term
|
Definition
| a statistic used to measure the variation of returns around an asset's average or expected return. |
|
|
Term
| coefficient of variation, CV |
|
Definition
| a statistic used to measure the relative dispersion os an asset's returns; it is useul in comparing the risk of assets with differing average or expected returns. |
|
|
Term
|
Definition
| describes an i.nvestor who does not reauire a change in return as compensation for greater risk |
|
|
Term
|
Definition
| describes an investor who requires greater return in exchange for greater risk |
|
|
Term
|
Definition
| describes an investor who will accept a lower return in exchange for greater risk |
|
|
Term
| growth-oriented portfolio |
|
Definition
| a portfolio whose primary objctive is long-term price appreciation |
|
|
Term
| income-oriented portfolio |
|
Definition
| a portdolio that stresses current dividend and interest returns. |
|
|
Term
|
Definition
| a portfolio that provides the highest return for a given level of risk or that has the lowest risk for a given level of return. |
|
|
Term
| diversifiable (unsystematic) risk |
|
Definition
| the portion of an investement's risk that results from uncontrollable or random events that are firm-specific; can be eliminated through diversification. |
|
|
Term
| nondiversifiable (systematic) risk |
|
Definition
| the inescapable portion of an investment's risk attributable to foraces that affect all investments and therefore are not unique to a given vehicle. |
|
|
Term
|
Definition
| the sum of an investment's nondiversifiable risk and nondiversifiable risk |
|
|
Term
|
Definition
| a measure of nondiversifiable risk that indicates how the price of a security responds to market forces. |
|
|
Term
|
Definition
| the average return for all stocks |
|
|
Term
| security market line (SML) |
|
Definition
| the graphical depreciation of the CAPM; reflects the investor's required return for each level of nondiversifiable risk, measured by beta. |
|
|
Term
| arbitrage pricing theory (APT) |
|
Definition
| a theory that suggests that the market risk premium on securities may be better explained by a number of factors underlying and in some cases replacing the market return in CAPM; the CAPM can be viewed as being derived from APT |
|
|
Term
| modern portfolio theory (MPT) |
|
Definition
| an approach to portfolio management that uses several basic statistical measures to develop a portfolio plan. |
|
|
Term
|
Definition
| the leftmost boundary of the attainable set of portfolios that includes all efficient portfolios--those providing the best attainable tradeoff between risk and return. |
|
|
Term
|
Definition
| risk that is nondiversifiable. |
|
|
