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Evaluation period

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Definition of Evaluation period

Evaluation Period Image 1

Evaluation period

The time interval over which a money manager's performance is evaluated.



Related Terms:

Dollar return

The return realized on a portfolio for any evaluation period, including (1) the change in market
value of the portfolio and (2) any distributions made from the portfolio during that period.


Dollar-weighted rate of return

Also called the internal rate of return, the interest rate that will make the
present value of the cash flows from all the subperiods in the evaluation period plus the terminal market value
of the portfolio equal to the initial market value of the portfolio.


Geometric mean return

Also called the time weighted rate of return, a measure of the compounded rate of
growth of the initial portfolio market value during the evaluation period, assuming that all cash distributions
are reinvested in the portfolio. It is computed by taking the geometric average of the portfolio subperiod
returns.


Return

The change in the value of a portfolio over an evaluation period, including any distributions made
from the portfolio during that period.


Subperiod return

The return of a portfolio over a shorter period of time than the evaluation period.



Total return

In performance measurement, the actual rate of return realized over some evaluation period. In
fixed income analysis, the potential return that considers all three sources of return (coupon interest, interest
on interest, and any capital gain/loss) over some i nvestment horizon.


Treynor Index

A measure of the excess return per unit of risk, where excess return is defined as the
difference between the portfolio's return and the risk-free rate of return over the same evaluation period and
where the unit of risk is the portfolio's beta.


Evaluation Period Image 2

Accounting period

The period of time for which financial statements are produced – see also financial year.


Annualized holding period return

The annual rate of return that when compounded t times, would have
given the same t-period holding return as actually occurred from period 1 to period t.


Annuity Period

The time between each payment under an annuity.


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
a company's products. It is calculated by dividing the value of the
accounts receivable by the average daily sales for the period.


Average collection period, or days' receivables

The ratio of accounts receivables to sales, or the total
amount of credit extended per dollar of daily sales (average AR/sales * 365).


Beggar-thy-neighbor devaluation

A devaluation that is designed to cheapen a nation's currency and thereby
increase its exports at other countries' expense and reduce imports. Such devaluations often lead to trade wars.


Compounding period

The length of the time period (for example, a quarter in the case of quarterly
compounding) that elapses before interest compounds.


compounding period

the time between each interest computation


Evaluation Period Image 3

Credit period

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.



Devaluation

Fall in the government-determined fixed exchange rate.


Devaluation A decrease in the spot price of the currency



Discount period

The period during which a customer can deduct the discount from the net amount of the bill
when making payment.


Discounted payback period rule

An investment decision rule in which the cash flows are discounted at an
interest rate and the payback rule is applied on these discounted cash flows.


Extended Amortization Period

An amortization period that continues beyond a long-lived asset's economic useful life.


Extended Amortization Periods

Amortizing capitalized expenditures over estimated useful lives that are unduly optimistic.


Full Credit Period

The period of trade credit given by a supplier to its customer.


Grace Period

A specific period of time after a premium payment is due during which the policy owner may make a payment, and during which, the protection of the policy continues. The grace period usually ends in 30 days.


Grace Period

Length of time during which repayments of loan principal are excused. Usually occurs at the start of the loan period.


Evaluation Period Image 4

Holding period

Length of time that an individual holds a security.



Holding period return

The rate of return over a given period.


Multiperiod immunization

A portfolio strategy in which a portfolio is created that will be capable of
satisfying more than one predetermined future liability regardless if interest rates change.


Net period

The period of time between the end of the discount period and the date payment is due.


Neutral period

In the Euromarket, a period over which Eurodollars are sold is said to be neutral if it does not
start or end on either a Friday or the day before a holiday.


Odd first or last period

Fixed-income securities may be purchased on dates
that do not coincide with coupon or payment dates. The length of the first and
last periods may differ from the regular period between coupons, and thus the
bond owner is not entitled to the full value of the coupon for that period.
Instead, the coupon is pro-rated according to how long the bond is held during
that period.


Payback Period

The number of years necessary for the net cash flows of an
investment to equal the initial cash outlay


payback period

the time it takes an investor to recoup an
original investment through cash flows from a project


payback period

Time until cash flows recover the initial investment of the project.


Performance evaluation

The evaluation of a manager's performance which involves, first, determining
whether the money manager added value by outperforming the established benchmark (performance
measurement) and, second, determining how the money manager achieved the calculated return (performance
attribution analysis).


performance evaluation

the process of determining the degree
of success in accomplishing a task; it equates to both
effectiveness and efficiency


period cost

cost other than one associated with making or acquiring inventory


Period costs

The costs that relate to a period of time.


periodic compensation

a pay plan based on the time spent on the task rather than the work accomplished


Periodic inventory

A physical inventory count taken on a repetitive basis.


Periodic inventory system

An inventory system in which the balance in the Inventory account is adjusted for the units sold only at the end of the period.


PPF (periodic perpetuity factor)

a generalization formula invented by Abrams that is the present value of regular but noncontiguous cash flows that have constant growth to perpetuity.


Reporting period

The time period for which transactions are compiled into a set of financial statements.


Revaluation

An increase in the foreign exchange value of a currency that is pegged to other currencies or gold.


T-period holding-period return

The percentage return over the T-year period an investment lasts.


Waiting period

Time during which the SEC studies a firm's registration statement. During this time the firm
may distribute a preliminary prospectus.


Waiting Period (Credit Insurance)

A specific time that must pass following the onset of a covered disability before any benefits will be paid under a creditor disability policy. (Also known as an elimination period).


Workout period

Realignment period of a temporary misaligned yield relationship that sometimes occurs in
fixed income markets.


expected standard

standard set at a level that reflects what
is actually expected to occur in the future period; it anticipates
future waste and inefficiencies and allows for them;
is of limited value for control and performance evaluation purposes



 

 

 

 

 

 

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