|Ex post return|
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Definition of Ex post return
Ex post return
Related: Holding period return
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.
Part of the return that is not due to systematic influences (market wide influences). In
The change in the value of a firm's foreign currency denominated accounts due to a
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 annual rate of return that when compounded t times, would have
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
The average project earnings after taxes and depreciation divided by the average
The ratio of the average cash inflow to the amount invested.
Related: pure expectations theory.
General term for a document demanding payment.
Designing a portfolio so that its performance will match the performance of some bond index.
Buying the index
Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the
Amount used during a particular period to acquire or improve long-term assets such as
Chicago Mercantile Exchange (CME)
A not-for-profit corporation owned by its members. Its primary
Commodities Exchange Center (CEC)
The location of five New York futures exchanges: Commodity
Consumer Price Index (CPI)
The CPI, as it is called, measures the prices of consumer goods and services and is a
Convertible exchangeable preferred stock
Convertible preferred stock that may be exchanged, at the
Bowed, as in the shape of a curve. Usually referring to the price/required yield relationship for
Cumulative abnormal return (CAR)
Sum of the differences between the expected return on a stock and the
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.
The extent to which the value of the firm will change because of an exchange rate change.
The convexity of a bond calculated with cash flows that change with yields.
Also called indexing plus, an indexing strategy whose objective is to exceed or replicate
A bond portfolio management strategy that involves finding the lowest cost portfolio
The expected return of a portfolio based on the expected returns of its component assets and
Except for opinion
An auditor's opinion reflecting the fact that the auditor was unable to audit certain areas
Any excess of actual reserves above required reserves.
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
A nickname for the New York stock exchange. Also known as the Big Board. More than
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.
Exchange Rate Mechanism (ERM)
The methodology by which members of the EMS maintain their
Exchange rate risk
Also called currency risk, the risk of an investment's value changing because of currency
The variability of a firm's value that results from unexpected exchange rate changes or the
Security that grants the security holder the right to exchange the security for the
The firm makes a tender offer for a given amount of its own stock while excluding
The process of completing an order to buy or sell securities. Once a trade is executed, it is reported
The difference between the execution price of a security and the price that would have
Instruments exempt from the registration requirements of the Securities Act of 1933 or the
To implement the right of the holder of an option to buy (in the case of a call) or sell (in the case of
The price at which the underlying future or options contract may be bought or sold.
The amount of advantage over a current market transaction provided by an in-the-money
Exercising the option
The act buying or selling the underlying asset via the option contract.
A variable whose value is determined outside the model in which it is used. Also called
Expectations hypothesis theories
Theories of the term structure of interest rates which include the pure
Expected future cash flows
Projected future cash flows associated with an asset of decision.
Expected future return
The return that is expected to be earned on an asset in the future. Also called the
The return expected on a risky asset based on a probability distribution for the possible rates
Expected return on investment
The return one can expect to earn on an investment. See: capital asset
Expected return-beta relationship
Implication of the CAPM that security risk premiums will be
The weighted average of a probability distribution.
Expected value of perfect information
The expected value if the future uncertain outcomes could be known
The percentage of the assets that were spent to run a mutual fund (as of the last annual
Charged to an expense account, fully reducing reported profit of that year, as is appropriate for
The time when the option contract ceases to exist (expires).
An expiration cycle relates to the dates on which options on a particular security expire. A
The last day (in the case of American-style) or the only day (in the case of European-style)
Export-Import Bank (Ex-Im Bank)
The U.S. federal government agency that extends trade credits to U.S.
Offsetting exposures in one currency with exposures in the same or another currency,
The official seizure by a government of private property. Any government has the right to
Bond whose maturity can be extended at the option of the lender or issuer.
Note the maturity of which can be extended by mutual agreement of the issuer and
Voluntary arrangements to restructure a firm's debt, under which the payment date is postponed.
The day on which the first option either expires or is extended.
extending maturity through a swap, e.g. selling a 2-year note and buying one with a slightly
Related: pricing efficiency.
Finance that is not generated by the firm: new borrowing or a stock issue.
Also referred to as the international market, the offshore market, or, more popularly, the
Retire or pay off debt.
Extra or special dividends
A dividend that is paid in addition to a firm's "regular" quarterly dividend.
Extraordinary positive value
A positive net present value.
Extrapolative statistical models
Models that apply a formula to historical data and project results for a
This literally means "without dividend." The buyer of shares when they are quoted ex-dividend
The first day of trading when the seller, rather than the buyer, of a stock will be entitled to
In connection with a rights offering, shares of stock that are trading without the rights attached.
The date on which a share of common stock begins trading ex-rights.
FHA prepayment experience
The percentage of loans in a pool of mortgages outstanding at the origination
A country's decision to tie the value of its currency to another country's currency, gold
Floating exchange rate
A country's decision to allow its currency value to freely change. The currency is not
Currency from another country.
Foreign exchange controls
Various forms of controls imposed by a government on the purchase/sale of
Foreign exchange dealer
A firm or individual that buys foreign exchange from one party and then sells it to
Foreign exchange risk
The risk that a long or short position in a foreign currency might have to be closed out
Foreign exchange swap
An agreement to exchange stipulated amounts of one currency for another currency
Forward exchange rate
exchange rate fixed today for exchanging currency at some future date.
Geometric mean return
Also called the time weighted rate of return, a measure of the compounded rate of
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