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Definition of Fundamental descriptors
In the model for calculating fundamental beta, ratios in risk indexes other than
Security analysis that seeks to detect misvalued securities by an analysis of the firm's
The product of a statistical model to predict the fundamental risk of a security using not
Variables that are used to describe the market on a technical basis.
Analysts who attempt to find under- or overvalued securities by analyzing fundamental information, such as earnings, asset values, and business prospects.
A method developed by BARRA, a consulting firm in
The measure of a fund's or stocks risk in relation to the market. A beta of 0.7 means
The beta of a fund is determined as follows:
The beta of a stock is determined as follows:
An analysis of the level of sales at which a project would make zero profit.
A statistical technique that identifies clusters of stocks whose returns are highly correlated
The representing of accounting information over multiple years as percentages
A method of analysis in which a firm is compared to others that have a desired
Covariance of a national economy's rate of return and the rate of return the world economy
The process of analyzing information on companies and bond issues in order to estimate the
A statistical process that links the probability of default to a specified set of financial ratios.
Expected return-beta relationship
Implication of the CAPM that security risk premiums will be
A statistical procedure that seeks to explain a certain phenomenon, such as the return on a
Foreign market beta
A measure of foreign market risk that is derived from the capital asset pricing model.
An analysis of returns using total return to assess performance over some investment horizon.
The process of dividing each expense item of a given year by the same expense item in
The beta of a leveraged required return; that is, the beta as adjusted for the degree of
Evaluation of risky prospects based on the expected value and variance of possible outcomes.
Multiple-discriminant analysis (MDA)
Statistical technique for distinguishing between two groups on the
Performance attribution analysis
The decomposition of a money manager's performance results to explain
Pro forma capital structure analysis
A method of analyzing the impact of alternative capital structure
A statistical technique that can be used to estimate relationships between variables.
The use of horizon analysis to project bond total returns under different reinvestment rates
analysis of the effect on a project's profitability due to changes in sales, cost, and so on.
Security analysis that seeks to detect and interpret patterns in past security prices.
The beta of an unleveraged required return (i.e. no debt) on an investment when the
The process of dividing each expense item in the income statement of a given year by net
A portfolio constructed to represent the risk-free asset, that is, having a beta of zero.
A financial analysis technique that relates key amounts on the income statement and balance sheet to a 100 percent or base figure for the present and previous year.
Cost–volume–profit analysis (CVP)
A method for understanding the relationship between revenue, cost and sales volume.
A method of analysing financial reports to interpret trends and make comparisons by using ratios – two numbers, with one generally expressed as a percentage of the other.
An approach to understanding how changes in one variable of cost–volume–profit analysis are affected by changes in the other variables.
A method of budgetary control that compares actual performance against plan, investigates the causes of the variance and takes corrective action to ensure that targets are achieved.
A method of relating numbers from the various financial statements to one another in order to get meaningful information for comparison.
capital investment analysis
Refers to various techniques and procedures
A measure of the riskiness of a specific security compared to the
The process of using financial ratios, calculated from key accounts
the process of detailing the various repetitive actions that are performed in making a product or
an analytical technique that uses statistical
cost-benefit analysis the analytical process of comparing the
relative costs and benefits that result from a specific course
cost driver analysis
the process of investigating, quantifying,
a process of evaluating changes that
least squares regression analysis
a statistical technique that investigates the association between dependent and independent variables; it determines the line of "best fit" for a set of observations by minimizing the sum of the squares
a method of ranking the causes of variation
a process of determining the amount of change that must occur in a variable before a different decision would be made
the process of categorizing the nature (favorable or unfavorable) of the differences between standard and actual costs and determining the reasons for those differences
The price volatility of a financial instrument relative to the price
Statistical analysis techniques that quantify the
The 80:20 ratio that states that 20% of the variables included in an
Sensitivity of a stock’s return to the return on the market
analysis of the level of sales at which the company breaks even.
Procedure to determine the likelihood a customer will pay its bills.
Project analysis given a particular combination of assumptions.
analysis of the effects of changes in sales, costs, and so on, on project profitability.
Estimation of the probabilities of different possible outcomes, e.g., from an investment project.
The calculation and comparison of the costs and benefits of a policy or project.
The examination of failure incidents to identify components
A measurement of the extent to which the returns on a given stock move with stock market.
Risk of a firm measured from the standpoint of an investor who holds a highly diversified portfolio.
An analytical technique for studying the relationships between fixed cost, variable cost, and profits. A breakeven chart graphically depicts the nature of breakeven analysis. The breakeven point represents the volume of sales at which total costs equal total revenues (that is, profits equal zero).
Financial Trend Analysis
Process of analyzing financial statements of a company for any continuing relationship.
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