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Definition of index funds
Mutual funds that aim to track the performance of a specific stock or bond index. This process is also referred to as indexing and passive management.
index Portfolio Rebalancing Service (IPRS) is a comprehensive investment service that can help increase potential returns while reducing volatility. Several portfolios are available, each with its own strategic balance of index funds. IPRS maintains your personal asset allocation by monitoring and rebalancing your portfolio semi-annually.
Also known as a trading index (TRIN)= (number of advancing issues)/ (number of declining
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:
Designing a portfolio so that its performance will match the performance of some bond index.
Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the
The CPI, as it is called, measures the prices of consumer goods and services and is a
Interest rate associated with borrowing money.
Indicated yield represents return on a share of a mutual fund held over the past 12
The European, Australian, and Far East stock index, computed by Morgan Stanley.
Investment funds established for the support of institutions such as colleges, private
Also called indexing plus, an indexing strategy whose objective is to exceed or replicate
Non-interest bearing deposits held in reserve for depository institutions at their district Federal
The market where banks can borrow or lend reserves, allowing banks temporarily
This is the interest rate that banks with excess reserves at a Federal Reserve district bank
Forward Fed funds
Fed funds traded for future delivery.
Funds From Operations (FFO)
Used by real estate and other investment trusts to define the cash flow from
Index and Option Market (IOM)
A division of the CME established in 1982 for trading stock index
An investment/trading strategy that exploits divergences between actual and theoretical
Investment fund designed to match the returns on a stockmarket index.
A model of stock returns using a market index such as the S&P 500 to represent common or
A call or put option based on a stock market index.
A stock index option issued by either a corporate or sovereign entity as part of a security
Bond whose payments are linked to an index, e.g. the consumer price index.
A passive instrument strategy consisting of the construction of a portfolio of stocks designed to
An index that uses the capital asset pricing model to determine whether a money manager
Market value-weighted index
An index of a group of securities computed by calculating a weighted average
Optimization approach to indexing
An approach to indexing which seeks to Optimize some objective, such
The present value of the future cash flows divided by the initial investment. Also called
Pure index fund
A portfolio that is managed so as to perfectly replicate the performance of the market portfolio.
Categories of risk used to calculate fundamental beta, including (1) market variability, (2)
Single index model
A model of stock returns that decomposes influences on returns into a systematic factor,
Related: market model
Stock index option
An option in which the underlying is a common stock index.
Stratified equity indexing
A method of constructing a replicating portfolio in which the stocks in the index
Stratified sampling approach to indexing
An approach in which the index is divided into cells, each
Stratified sampling bond indexing
A method of bond indexing that divides the index into cells, each cell
For a stock index option, the index value at which the buyer of the option can buy or sell the
Cash flow available after payment of taxes in the project.
Term Fed Funds
Fed funds sold for a period of time longer than overnight.
A measure of the excess return per unit of risk, where excess return is defined as the
Mutual funds that do not charge an upfront or back-end commission, but instead take out up to
See cash value added.
The capital invested in a business by the shareholders, including retained profits.
A method for determining the profitability of an investment. It is
present value index
see profitability index
profitability index (Pl)
a ratio that compares the present value of net cash flows to the present value of the net investment
internally generated funds
Cash reinvested in the firm; depreciation plus earnings not paid out as dividends.
Measure of the investment performance of the overall market.
Ratio of net present value to initial investment.
Standard & Poorâ€™s Composite Index
index of the investment performance of a portfolio of 500 large stocks. Also called the
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.
Federal Funds Rate
The interest rate at which banks lend deposits at the Federal Reserve to one another overnight.
A series of numbers measuring percentage changes over time from a base period. The index number for the base period is by convention set equal to 100.
A measure of the price level calculated by comparing the cost of a bundle of goods and services in a given year with its cost in a base year. See also index.
Labour-Sponsored Venture Funds
Venture capital corporations established by labour unions. They function as other venture capital corporations but are subject to government regulation.
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.
Mutual funds that seek long-term capital growth. This type of fund invests primarily in equity securities.
Mutual funds that seek regular income. This type of fund invests primarily in government, corporate and other types of bonds, debt securities, and other income producing securities and in certain circumstances can also hold common and preferred shares.
An index is a statistical measure of a market based on the performance of a sample of securities in that market. For example, the S&P/TSX Composite index reflects the performance of the most actively traded stocks on The Toronto Stock Exchange.
NSF (non-sufficient funds)
This appears on your statement if there are insufficient funds in your account to cover a cheque that you have written or a pre-authorized payment that you have already arranged. You will be charged a service fee for non-sufficient funds.
Mutual funds that seek to preserve capital. This type of fund invests primarily in short-term securities with an average term to maturity of one year or less, or in the case of money market funds, 90 days or less.
The adjustment of benefits to compensate for the effects of inflation.
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