|Market value-weighted index|
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Definition of Market value-weighted index
Market value-weighted index
An index of a group of securities computed by calculating a weighted average
an amount or percentage deducted from an equity interest to reflect lack of marketability.
Same as PV, but usually includes a subtraction for an initial cash outlay.
the value in today’s dollars of cash flows that occur in different time periods.
model for calculating DLOM for minority interests r the discount rate
The net present value analysis of an asset if financed solely by equity
Also known as a trading index (TRIN)= (number of advancing issues)/ (number of declining
markets in which the prevailing price is determined through the free interaction of
Any market in which prices are in a declining trend.
An illegal market.
Designing a portfolio so that its performance will match the performance of some bond index.
With respect to convertible bonds, the value the security would have if it were not convertible
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A
The ratio of stockholder equity to the average number of common shares. Book value
A market where an intermediary offers search services to buyers and sellers.
Any market in which prices are in an upward trend.
The foreign market in the United Kingdom.
Buying the index
Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the
The market for trading long-term debt instruments (those that mature in more than one year).
Capital market efficiency
Reflects the relative amount of wealth wasted in making transactions. An efficient
Capital market imperfections view
The view that issuing debt is generally valuable but that the firm's
Capital market line (CML)
The line defined by every combination of the risk-free asset and the market portfolio.
Also called spot markets, these are markets that involve the immediate delivery of a security
An amount the insurance company will pay if the policyholder ends a whole life
An agreement between two or more countries that permits the free movement of capital
Common stock market
The market for trading equities, not including preferred stock.
Complete capital market
A market in which there is a distinct marketable security for each and every
Consumer Price Index (CPI)
The CPI, as it is called, measures the prices of consumer goods and services and is a
Also called parity value, the value of a convertible security if it is converted immediately.
Corner A Market
To purchase enough of the available supply of a commodity or stock in order to
A market where traders specializing in particular commodities buy and sell assets for their
The market for trading debt instruments.
markets for derivative instruments.
Direct search market
Buyers and sellers seek each other directly and transact directly.
Dollar-weighted rate of return
Also called the internal rate of return, the interest rate that will make the
Part of a nation's internal market representing the mechanisms for issuing and trading
The European, Australian, and Far East stock index, computed by Morgan Stanley.
Efficient capital market
A market in which new information is very quickly reflected accurately in share
Efficient Market Hypothesis
In general the hypothesis states that all relevant information is fully and
In the interbank Eurodollar deposit market, an either-way market is one in which the bid
The financial markets of developing economies.
Also called indexing plus, an indexing strategy whose objective is to exceed or replicate
Equilibrium market price of risk
The slope of the capital market line (CML). Since the CML represents the
The money market for borrowing and lending currencies that are held in the form of
Excess return on the market portfolio
The difference between the return on the market portfolio and the
The amount of advantage over a current market transaction provided by an in-the-money
The weighted average of a probability distribution.
Expected value of perfect information
The expected value if the future uncertain outcomes could be known
Also referred to as the international market, the offshore market, or, more popularly, the
Extraordinary positive value
A positive net present value.
See: Par value.
Fair market price
Amount at which an asset would change hands between two parties, both having
Federal funds market
The market where banks can borrow or lend reserves, allowing banks temporarily
An organized institutional structure or mechanism for creating and exchanging financial assets.
Firm's net value of debt
Total firm value minus total firm debt.
The market for trading bonds and preferred stock.
Foreign banking market
That portion of domestic bank loans supplied to foreigners for use abroad.
Foreign bond market
That portion of the domestic bond market that represents issues floated by foreign
Foreign equity market
That portion of the domestic equity market that represents issues floated by foreign companies.
Part of a nation's internal market, representing the mechanisms for issuing and trading
Foreign market beta
A measure of foreign market risk that is derived from the capital asset pricing model.
A market in which participants agree to trade some commodity, security, or foreign
Direct trading in exchange-listed securities between investors without the use of a broker.
The amount of cash at a specified date in the future that is equivalent in value to a specified
A market in which contracts for future delivery of a commodity or a security are bought or sold.
Purchases and sales of eurobonds that occur before the issue price is finally set.
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
spread The spread between the interest rate offered in two sectors of the bond market for
Intermarket spread swaps
An exchange of one bond for another based on the manager's projection of a
The mechanisms for issuing and trading securities within a nation, including its domestic
Internally efficient market
Operationally efficient market.
Related: See external market.
International Monetary Market (IMM)
A division of the CME established in 1972 for trading financial
Intramarket sector spread
The spread between two issues of the same maturity within a market sector. For
Intrinsic value of an option
The amount by which an option is in-the-money. An option which is not in-themoney
Intrinsic value of a firm
The present value of a firm's expected future net cash flows discounted by the
A futures market in which the nearer months are selling at price premiums to the more
An index that uses the capital asset pricing model to determine whether a money manager
Net amount that could be realized by selling the assets of a firm after paying the debt.
The amount a policyholder may borrow against a whole life insurance policy at the interest rate
A market is locked if the bid = ask price. This can occur, for example, if the market is
Make a market
A dealer is said to make a market when he quotes bid and offered prices at which he stands
The process whereby the book value or collateral value of a security is adjusted to reflect
An arrangement whereby the profits or losses on a futures contract are settled each day.
The total dollar value of all outstanding shares. Computed as shares times current
Market capitalization rate
Expected return on a security. The market-consensus estimate of the appropriate
Total demand for loans by borrowers equals total supply of loans from lenders. The market,
Market conversion price
Also called conversion parity price, the price that an investor effectively pays for
The period between the 2 latest highs or lows of the S&P 500, showing net performance of a
Market impact costs
Also called price impact costs, the result of a bid/ask spread and a dealer's price concession.
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