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Definition of Minimum-variance portfolio
The portfolio of risky assets with lowest variance.
A strategy that uses available information and forecasting techniques to seek a
The entire portfolio, including risky and risk-free assets.
A statistical measure of the degree to which random variables move together.
Related: cash flow matching.
A portfolio that provides the greatest expected return for a given level of risk (i.e. standard
The difference between the return on the market portfolio and the
A well-diversified portfolio constructed to have a beta of 1.0 on one factor and a beta of
A portfolio that an investor can construct given the assets available.
The collection of all feasible portfolios.
A portfolio consisting of the long position in the stock and the short position in the call
A portfolio that includes risky assets purchased with funds borrowed.
A portfolio that includes risky assets purchased with funds borrowed.
A portfolio consisting of all assets available to investors, with each asset held -in
Also called a mean-variance efficient portfolio, a portfolio that has the highest
The collection of all efficient portfolios, graphically referred to as the
Evaluation of risky prospects based on the expected value and variance of possible outcomes.
The selection of portfolios based on the means and variances of their returns. The
Mean-variance efficient portfolio
Related: Markowitz efficient portfolio
Minimum price fluctuation
Smallest increment of price movement possible in trading a given contract. Also
For mutual funds, the amount required to open a new account (minimum Initial
Graph of the lowest possible portfolio variance that is attainable for a given
Modern portfolio theory
Principles underlying the analysis and evaluation of rational portfolio choices
A customized benchmark that includes all the securities from which a manager normally
An efficient portfolio most preferred by an investor because its risk/reward characteristics
Passive portfolio strategy
A strategy that involves minimal expectational input, and instead relies on
A market index portfolio.
A collection of investments, real and/or financial.
A strategy using a leveraged portfolio in the underlying stock to create a synthetic put
Portfolio internal rate of return
The rate of return computed by first determining the cash flows for all the
Portfolio opportunity set
The expected return/standard deviation pairs of all portfolios that can be
Related: Investment management
Related: Investment manager
Portfolio separation theorem
An investor's choice of a risky investment portfolio is separate from his
Portfolio turnover rate
For an investment company, an annualized rate found by dividing the lesser of
Weighted sum of the covariance and variances of the assets in a portfolio.
A portfolio constructed to match an index or benchmark.
The covariance between a variable and the lagged value of the variable; the same as
Structured portfolio strategy
A strategy in which a portfolio is designed to achieve the performance of some
An indexing strategy that is linked to active management through the emphasis of a
A measure of dispersion of a set of data points around their mean value. The mathematical
Variance minimization approach to tracking
An approach to bond indexing that uses historical data to
Specifies the permitted minimum or maximum quantity of securities that can be delivered to
Weighted average portfolio yield
The weighted average of the yield of all the bonds in a portfolio.
Well diversified portfolio
A portfolio spread out over many securities in such a way that the weight in any
A portfolio constructed to represent the risk-free asset, that is, having a beta of zero.
A portfolio of zero net value established by buying and shorting component
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 collection of securities and investments held by an investor
The percentage of a total portfolio represented by a single specific
The weighted average of the squared deviations from the
the difference between total actual overhead
the budget variance of the two variance approach to analyzing overhead variances
fixed overhead spending variance
the difference between the total actual fixed overhead and budgeted fixed overhead;
fixed overhead volume variance
see volume variance
labor efficiency variance
the number of hours actually worked minus the standard hours allowed for the production
labor mix variance
(actual mix X actual hours X standard rate) - (standard mix X actual hours X standard rate);
labor rate variance
the actual rate (or actual weighted average rate) paid to labor for the period minus the standard rate multiplied by all hours actually worked during the period;
labor yield variance
(standard mix X actual hours X standard rate) - (standard mix X standard hours X standard rate);
material price variance
total actual cost of material purchased
material quantity variance
(actual quantity X standard price) - (standard quantity allowed standard price);
material mix variance
(actual mix X actual quantity X standard price) - (standard mix X actual quantity X standardprice);
material yield variance
(standard mix X actual quantity X standard price) - (standard mix X standard quantity X standard price);
the fixed overhead volume variance;
overhead efficiency variance
the difference between total budgeted overhead at actual hours and total budgeted
overhead spending variance
the difference between total actual overhead and total budgeted overhead at actual
total overhead variance
the difference between total actual overhead and total applied overhead; it is the amount of underapplied or overapplied overhead
the difference between total actual cost incurred
variable overhead efficiency variance
the difference between budgeted variable overhead based on actual input activity and variable overhead applied to production
variable overhead spending variance
the difference between total actual variable overhead and the budgeted amount of variable overhead based on actual input activity
a difference between an actual and a standard or
the process of categorizing the nature (favorable or unfavorable) of the differences between standard and actual costs and determining the reasons for those differences
a fixed overhead variance that represents
A measure of the degree to which returns on two assets move in
The dispersion of a variable. The square of the standard deviation.
Direct materials mix variance
The variance between the budgeted and actual mixes of
Labor efficiency variance
The difference between the amount of time that was budgeted
Labor rate variance
The difference between the actual and standard direct labor rates
Materials price variance
The difference between the actual and budgeted cost to
Materials quantity variance
The difference between the actual and budgeted quantities
Production yield variance
The difference between the actual and budgeted proportions
Selling price variance
The difference between the actual and budgeted selling price for
portfolio of all assets in the economy. In practice a broad stock market index, such as the Standard & Poor's Composite, is used to represent the market.
Average value of squared deviations from mean. A measure of volatility.
An hourly wage rate set by the federal government below
An inventory item’s budgeted minimum inventory level.
The total of all investment opportunities available to the investor.
Index Portfolio Rebalancing Service (IPRS)
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.
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