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Endogenous |
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Definition of EndogenousEndogenousDetermined from within the system. Opposite of exogenous.
Related Terms:Endogenous variableA value determined within the context of a model. VariableA value determined within the context of a model. Also called endogenous variable. economic components modelAbrams’ model for calculating DLOM based on the interaction of discounts from four economic components. Gordon modelpresent value of a perpetuity with growth. log size modelAbrams’ model to calculate discount rates as a function of the logarithm of the value of the firm. NPV (net present value of cash flows)Same as PV, but usually includes a subtraction for an initial cash outlay. PV (present value of cash flows)the value in today’s dollars of cash flows that occur in different time periods. QMDM (quantitative marketability discount model)model for calculating DLOM for minority interests r the discount rate Accelerated cost recovery system (ACRS)Schedule of depreciation rates allowed for tax purposes. Adjusted present value (APV)The net present value analysis of an asset if financed solely by equity Arbitrage-free option-pricing modelsYield curve option-pricing models. Asset pricing modelA model for determining the required rate of return on an asset. Asset pricing modelA model, such as the Capital Asset Pricing model (CAPM), that determines the required Binomial option pricing modelAn option pricing model in which the underlying asset can take on only two Black-Scholes option-pricing modelA model for pricing call options based on arbitrage arguments that uses Bond valueWith respect to convertible bonds, the value the security would have if it were not convertible Book valueA company's book value is its total assets minus intangible assets and liabilities, such as debt. A Book value per shareThe ratio of stockholder equity to the average number of common shares. Book value Capital asset pricing model (CAPM)An economic theory that describes the relationship between risk and Carrying valueBook value. Cash-surrender valueAn amount the insurance company will pay if the policyholder ends a whole life Clearing House Automated Payments System (CHAPS)A computerized clearing system for sterling funds Clearing House Interbank Payments System (CHIPS)An international wire transfer system for high-value Constant-growth modelAlso called the Gordon-Shapiro model, an application of the dividend discount Continuous random variableA random value that can take any fractional value within specified ranges, as Conversion valueAlso called parity value, the value of a convertible security if it is converted immediately. Deterministic modelsLiability-matching models that assume that the liability payments and the asset cash Discounted dividend model (DDM)A formula to estimate the intrinsic value of a firm by figuring the Discrete random variableA random variable that can take only a certain specified set of discrete possible Dividend discount model (DDM)A model for valuing the common stock of a company, based on the Dividend growth modelA model wherein dividends are assumed to be at a constant rate in perpetuity. Dupont system of financial controlHighlights the fact that return on assets (ROA) can be expressed in terms European Monetary System (EMS)An exchange arrangement formed in 1979 that involves the currencies Exercise valueThe amount of advantage over a current market transaction provided by an in-the-money Exogenous variableA variable whose value is determined outside the model in which it is used. Also called Expected valueThe weighted average of a probability distribution. Expected value of perfect informationThe expected value if the future uncertain outcomes could be known Extraordinary positive valueA positive net present value. Extrapolative statistical modelsmodels that apply a formula to historical data and project results for a Face valueSee: Par value. Factor modelA way of decomposing the factors that influence a security's rate of return into common and Federal Reserve SystemThe central bank of the U.S., established in 1913, and governed by the Federal Firm's net value of debtTotal firm value minus total firm debt. Flat price (also clean price)The quoted newspaper price of a bond that does not include accrued interest. Future valueThe amount of cash at a specified date in the future that is equivalent in value to a specified Garmen-Kohlhagen option pricing modelA widely used model for pricing foreign currency options. Imputation tax systemArrangement by which investors who receive a dividend Also receive a tax credit for Index modelA model of stock returns using a market index such as the S&P 500 to represent common or Intrinsic value of an optionThe amount by which an option is in-the-money. An option which is not in-themoney Intrinsic value of a firmThe present value of a firm's expected future net cash flows discounted by the Investment valueRelated:straight value. Just-in-time inventory systemssystems that schedule materials/inventory to arrive exactly as they are Liquidation valueNet amount that could be realized by selling the assets of a firm after paying the debt. Loan valueThe amount a policyholder may borrow against a whole life insurance policy at the interest rate Market modelThis relationship is sometimes called the single-index model. The market model says that the Market value1) The price at which a security is trading and could presumably be purchased or sold. Market value ratiosRatios that relate the market price of the firm's common stock to selected financial Market value-weighted indexAn index of a group of securities computed by calculating a weighted average Maturity valueRelated: par value. ModelingThe process of creating a depiction of reality, such as a graph, picture, or mathematical Multirule systemA technical trading strategy that combines mechanical rules, such as the CRISMA Net adjusted present valueThe adjusted present value minus the initial cost of an investment. Net asset value (NAV)The value of a fund's investments. For a mutual fund, the net asset value per share Net book valueThe current book value of an asset or liability; that is, its original book value net of any Net present value (NPV)The present value of the expected future cash flows minus the cost. Net present value of growth opportunitiesA model valuing a firm in which net present value of new Net present value of future investmentsThe present value of the total sum of NPVs expected to result from Net present value ruleAn investment is worth making if it has a positive NPV. Projects with negative NPVs Net salvage valueThe after-tax net cash flow for terminating the project. Nonsystematic riskNonmarket or firm-specific risk factors that can be eliminated by diversification. Also Normal random variableA random variable that has a normal probability distribution. Original face valueThe principal amount of the mortgage as of its issue date. Par valueAlso called the maturity value or face value, the amount that the issuer agrees to pay at the maturity date. Parity valueRelated:conversion value Pie model of capital structureA model of the debt/equity ratio of the firms, graphically depicted in slices of Present valueThe amount of cash today that is equivalent in value to a payment, or to a stream of payments, Present value factorFactor used to calculate an estimate of the present value of an amount to be received in Present value of growth opportunities (NPV)Net present value of investments the firm is expected to make Price value of a basis point (PVBP)Also called the dollar value of a basis point, a measure of the change in Progressive tax systemA tax system wherein the average tax rate increases for some increases in income but Random variableA function that assigns a real number to each and every possible outcome of a random experiment. Relative valueThe attractiveness measured in terms of risk, liquidity, and return of one instrument relative to Replacement valueCurrent cost of replacing the firm's assets. Residual valueUsually refers to the value of a lessor's property at the time the lease expires. Salvage valueScrap value of plant and equipment. Single factor modelA model of security returns that acknowledges only one common factor. Single index modelA model of stock returns that decomposes influences on returns into a systematic factor, Simple linear trend modelAn extrapolative statistical model that asserts that earnings have a base level and Single-index modelRelated: market model Split-rate tax systemA tax system that taxes retained earnings at a higher rate than earnings that are Standardized valueAlso called the normal deviate, the distance of one data point from the mean, divided by Stochastic modelsLiability-matching models that assume that the liability payments and the asset cash flows Straight valueAlso called investment value, the value of a convertible security without the con-version option. SystematicCommon to all businesses. Systematic riskAlso called undiversifiable risk or market risk, the minimum level of risk that can be Systematic risk principleOnly the systematic portion of risk matters in large, well-diversified portfolios. Terminal valueThe value of a bond at maturity, typically its par value, or the value of an asset (or an entire Time value of an optionThe portion of an option's premium that is based on the amount of time remaining Time value of moneyThe idea that a dollar today is worth more than a dollar in the future, because the dollar Two-factor modelBlack's zero-beta version of the capital asset pricing model. Two-state option pricing modelAn option pricing model in which the underlying asset can take on only two
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