|Markowitz efficient set of portfolios
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Definition of Markowitz efficient set of portfolios
Markowitz efficient set of portfolios
The collection of all efficient portfolios, graphically referred to as the
The graphical depiction of the markowitz efficient set of portfolios
A merger or consolidation in which an acquirer purchases the selling firm's assets.
Any possession that has value in an exchange.
The ratio of total assets to stockholder equity.
Also called surplus management, the task of managing funds of a financial
Ratios that measure how effectively the firm is managing its assets.
The decision regarding how an institution's funds should be distributed among the
A security that is collateralized by loans, leases, receivables, or installment contracts
Methods of financing in which lenders and equity investors look principally to the
Categories of assets, such as stocks, bonds, real estate and foreign securities.
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
Creditors exchange the debt of one defaulting borrower for the debt of another
A model for determining the required rate of return on an asset.
A firm's investing in assets that are riskier than those that the debtholders expected.
Arises when the stockholders substitute riskier assets for the firm's existing
An interest rate swap used to alter the cash flow characteristics of an institution's assets so as to
The ratio of net sales to total assets.
Asset pricing model
A model, such as the Capital Asset Pricing Model (CAPM), that determines the required
A firm's productive resources.
A common element of a financial plan that describes projected capital spending and the
Bank for International Settlements (BIS)
An international bank headquartered in Basel, Switzerland, which
Capital asset pricing model (CAPM)
An economic theory that describes the relationship between risk and
Cash settlement contracts
Futures contracts, such as stock index futures, that settle for cash, not involving
Coefficient of determination
A measure of the goodness of fit of the relationship between the dependent and
A standardized statistical measure of the dependence of two random variables,
Value of cash, accounts receivable, inventories, marketable securities and other assets that
Dynamic asset allocation
An asset allocation strategy in which the asset mix is mechanistically shifted in
Efficient capital market
A market in which new information is very quickly reflected accurately in share
The organizing principle of modern portfolio theory, which maintains that any riskaverse
The combinations of securities portfolios that maximize expected return for any level of
Efficient Market Hypothesis
In general the hypothesis states that all relevant information is fully and
A portfolio that provides the greatest expected return for a given level of risk (i.e. standard
Exchange of assets
Acquisition of another company by purchase of its assets in exchange for cash or stock.
Feasible set of portfolios
The collection of all feasible portfolios.
Claims on real assets.
Long-lived property owned by a firm that is used by a firm in the production of its income.
Fixed asset turnover ratio
The ratio of sales to fixed assets.
Good delivery and settlement procedures
Refers to PSA Uniform Practices such as cutoff times on delivery
Delivery and settlement of securities within five business days.
Information Coefficient (IC)
The correlation between predicted and actual stock returns, sometimes used to
A legal claim to some future benefit, typically a claim to future cash. Goodwill, intellectual
Internally efficient market
Operationally efficient market.
Asset that is easily and cheaply turned into cash - notably cash itself and short-term securities.
Value of property, equipment and other capital assets minus the depreciation. This is an
Limitation on asset dispositions
A bond covenant that restricts in some way a firm's ability to sell major assets.
A strategy that seeks to combine assets a portfolio with returns that are less than
Markowitz efficient portfolio
Also called a mean-variance efficient portfolio, a portfolio that has the highest
Mean-variance efficient portfolio
Related: markowitz efficient portfolio
A system, such as the arrangement between the CME and SIMEX, which allows trading
Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share
The difference between total assets on the one hand and current liabilities and noncapitalized longterm
A tangible asset with unique physical properties, like a parcel of land, a mine, or a
Elimination of a long or short position by making an opposite transaction. Related: liquidation.
Operationally efficient market
Also called an internally efficient market, one in which investors can obtain
The possible expected return and standard deviation pairs of all portfolios that can be
Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due
Policy asset allocation
A long-term asset allocation method, in which the investor seeks to assess an
Portfolio opportunity set
The expected return/standard deviation pairs of all portfolios that can be
Publicly traded assets
Assets that can be traded in a public market, such as the stock market.
Current assets minus inventories.
Identifiable assets, such as buildings, equipment, patents, and trademarks, as distinguished from a
Regular way settlement
In the money and bond markets, the regular basis on which some security trades are
A tangible asset with physical properties that can be reproduced, such as a building or
The frequency with which the floating rate changes.
Assets that remain after sufficient assets are dedicated to meet all senior debtholder's claims in full.
Return on assets (ROA)
Indicator of profitability. Determined by dividing net income for the past 12 months
Return on total assets
The ratio of earnings available to common stockholders to total assets.
Riskless or risk-free asset
An asset whose future return is known today with certainty. The risk free asset is
An asset whose future return is uncertain.
An asset whose future return is known today with certainty.
Set of contracts perspective
View of corporation as a set of contracting relationships, among individuals
When payment is made for a trade.
The date on which payment is made to settle a trade. For stocks traded on US exchanges,
A figure determined by the closing range which is used to calculate gains and losses in
The rate suggested in Financial Accounting Standard Board (FASB) 87 for discounting the
The trade is settled one business day beyond what is normal.
An agreement in settlement of a lawsuit involving specific payments made over a
Tactical Asset Allocation (TAA)
An asset allocation strategy that allows active departures from the normal
An asset whose value depends on particular physical properties. These i nclude reproducible
Total asset turnover
The ratio of net sales to total assets.
The asset that an option gives the option holder the right to buy or to sell.
An asset which has a limited life and thus, decreases in value (depreciates) over time. Also
Anything of value that a company owns.
Cash, things that will be converted into cash within a year (such as accounts receivable), and inventory.
RATE OF RETURN ON TOTAL ASSETS
The percentage return or profit that management made on each dollar of assets. The formula is:
Things that the business owns.
Amounts receivable by the business within a period of 12 months, including bank, debtors, inventory and prepayments.
Things that the business owns and are part of the business infrastructure â€“ fixed assets may be
Intangible fixed assets
Non-physical assets, e.g. customer goodwill or intellectual property (patents and trademarks).
The time required to make ready a machine or process for production, e.g. changing equipment
Tangible fixed assets
Physical assets that can be seen and touched, e.g. buildings, machinery, vehicles, computers etc.
Items owned by the company or expenses that have been paid for but have not been used up.
An offset to an asset account that reduces the balance of the asset account.
Assets owned by the company that do not possess physical substance; they usually take the form of rights and privileges such as patents, copyrights, and franchises.
asset turnover ratio
A broad-gauge ratio computed by dividing annual
Current refers to cash and those assets that will be turned
An informal term that refers to the variety of long-term operating
return on assets (ROA)
Although there is no single uniform practice for
The amount of total risk that can be eliminated by diversification by
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