|Difference from S&P|
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Definition of Difference from S&P
Difference from S&P
A mutual fund's return minus the change in the Standard & Poors 500 Index for the
mutual funds that do not charge an upfront or back-end commission, but instead take out up to
Part of the return that is not due to systematic influences (market wide influences). In
Goods may be returned to the seller by the purchaser without restrictions.
An alteration in the accounting methodology or estimates used in
The period of time for which financial statements are produced – see also financial year.
A method of investment appraisal that measures
the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow
Money after-tax rate of return minus the inflation rate.
The second-largest stock exchange in the United States. It trades
For investment companies, the management fee and "other expenses,"
The periodic rate times the number of periods in a year. For example, a 5%
Interest rate that is annualized using simple interest.
The effective, or true, annual rate of return. The APY is the rate actually
The fund return, for any 12-month period, including changes in unit value and the reinvestment of distributions, but not taking into account sales, redemption, distribution or other optional charges or income taxes payable by any unitholder that would reduce returns.
If stock X appreciates 1.5% in one month, the annualized gain for that sock over a twelve
Annualized holding period return
The annual rate of return that when compounded t times, would have
The time between each payment under an annuity.
Arithmetic average (mean) rate of return
Arithmetic mean return.
Arithmetic mean return
An average of the subperiod returns, calculated by summing the subperiod returns
Also known as a trading Index (TRIN)= (number of advancing issues)/ (number of declining
Average accounting return
The average project earnings after taxes and depreciation divided by the average
Average Amortization Period
The average useful life of a company's collective amortizable asset base.
Average Collection Period
Average number of days necessary to receive cash for the sale of
Average collection period, or days' receivables
The ratio of accounts receivables to sales, or the total
Average rate of return (ARR)
The ratio of the average cash inflow to the amount invested.
An investment company that invests in stocks and bonds. The same as a balanced mutual fund.
Balanced mutual fund
This is a fund that buys common stock, preferred stock and bonds. The same as a
Gives the lessee the option to purchase the asset at a price below fair market
Beta equation (Mutual Funds)
The beta of a fund is determined as follows:
Beta (Mutual Funds)
The measure of a fund's or stocks risk in relation to the market. A beta of 0.7 means
Bill of exchange
General term for a document demanding payment.
Designing a portfolio so that its performance will match the performance of some bond Index.
A conventional unit of measure for bond prices set at $10 and equivalent to 1% of the $100 face
book rate of return
Accounting income divided by book value.
Book yield is the investment income earned in a year on a portfolio of assets purchased over a number of years and at different interest rates, divided by the book value of those assets.
Related: Premium payback period.
Buying the index
Purchasing the stocks in the S&P 500 in the same proportion as the Index to achieve the
When a stock is sold for a profit, it's the difference between the net sales price of securities and
The gain recognized on the sale of a capital item (fixed asset), calculated
An increase in the value of an asset.
The positive difference between the adjusted cost base of an investment held as a capital property and the proceeds of disposition you receive when you sell it. When you sell such an investment for more than you paid, you realize a capital gain.
Capital gains yield
The price change portion of a stock's return.
Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized against
CARs (cumulative abnormal returns)
a measure used in academic finance articles to measure the excess returns an investor would have received over a particular time period if he or she were invested in a particular stock.
Cash flow time-line
Line depicting the operating activities and cash flows for a firm over a particular period.
Change in Accounting Estimate
A change in accounting that occurs as the result of new information
Change in Accounting Estimate
A change in the implementation of an existing accounting
Change in Accounting Principle
A change from one generally accepted accounting principle to another generally accepted accounting principle—for example, a change from capitalizing expenditures
Change in Reporting Entity
A change in the scope of the entities included in a set of, typically, consolidated financial statements.
Changes in Financial Position
Sources of funds internally provided from operations that alter a company's
Chicago Mercantile Exchange (CME)
A not-for-profit corporation owned by its members. Its primary
An investment company that sells shares like any other corporation and usually does not
Committee, AIMR Performance Presentation Standards Implementation Committee
The Association for Investment Management and Research (AIMR)'s Performance Presentation Standards Implementation
Commodities Exchange Center (CEC)
The location of five New York futures exchanges: Commodity
The length of the time period (for example, a quarter in the case of quarterly
the time between each interest computation
Consumer Price Index (CPI)
The CPI, as it is called, measures the prices of consumer goods and services and is a
Consumer Price Index (CPI)
An Index calculated by tracking the cost of a typical bundle of consumer goods and services over time. It is commonly used to measure inflation.
Contract Work Hours and Safety Standards Act
A federal Act requiring federal contractors to pay overtime for hours worked exceeding 40 per week.
Convertible exchangeable preferred stock
Convertible preferred stock that may be exchanged, at the
Cost Accounting Standards Board (CASB)
a body established by Congress in 1970 to promulgate cost accounting
Cost of funds
Interest rate associated with borrowing money.
The length of time for which the customer is granted credit.
Critical Growth Periods
times in a company's history when growth is essential and without which survival of the business might be in jeopardy.
Cumulative abnormal return (CAR)
Sum of the differences between the expected return on a stock and the
Cumulative Effect of a Change in Accounting Principle
The change in earnings of previous years
Cumulative Effect of Accounting Change
The change in earnings of previous years assuming
the time between the placement of an order to
Those points designated by futures exchanges at which the financial instrument or
The period during which a customer can deduct the discount from the net amount of the bill
Discounted payback period rule
An investment decision rule in which the cash flows are discounted at an
Dividend yield (Funds)
Indicated yield represents return on a share of a mutual fund held over the past 12
The return realized on a portfolio for any evaluation period, including (1) the change in market
Dollar-weighted rate of return
Also called the internal rate of return, the interest rate that will make the
The European, Australian, and Far East stock Index, computed by Morgan Stanley.
Effective Exchange Rate
The weighted average of several exchange rates, where the weights are determined by the extent of our trade done with each country.
EFT (electronic funds transfer)
funds which are electronically credited to your account (e.g. direct deposit), or electronically debited from your account on an ongoing basis (e.g. a pre-authorized monthly bill payment, or a monthly loan or mortgage payment). A wire transfer is a form of EFT.
Electronic data interchange (EDI)
The exchange of information electronically, directly from one firm's
electronic data interchange (EDI)
the computer-to-computer transfer of information in virtual real time using Standardized formats developed by the American National Standards Institute
Embodied Technical Change
Technical change that can be used only when new capital embodying this technical change is produced.
Employee stock fund
A firm-sponsored program that enables employees to purchase shares of the firm's
employee time sheet
a source document that indicates, for each employee, what jobs were worked on during the day and for what amount of time
Investment funds established for the support of institutions such as colleges, private
A change to a product’s specifications as issued by the engineering
engineering change order (ECO)
a business mandate that changes the way in which a product is manufactured or a
Also called Indexing plus, an Indexing strategy whose objective is to exceed or replicate
Equation of Exchange
The quantity theory equation Mv = PQ.
a Standard representing beliefs about moral
The time interval over which a money manager's performance is evaluated.
Ex post return
Related: Holding period return
The expected return of a portfolio based on the expected returns of its component assets and
Excess return on the market portfolio
The difference between the return on the market portfolio and the
Also called abnormal returns, returns in excess of those required by some asset pricing model.
The marketplace in which shares, options and futures on stocks, bonds, commodities and indices
Governmental restrictions on the purchase of foreign currencies by domestic citizens or
Exchange of assets
Acquisition of another company by purchase of its assets in exchange for cash or stock.
Exchange of stock
Acquisition of another company by purchase of its stock in exchange for cash or shares.
An offer by the firm to give one security, such as a bond or preferred stock, in exchange for
The price of one country's currency expressed in another country's currency.
Amount of one currency needed to purchase one unit of another.
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