|Security selection decision|
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Definition of Security selection decision
Security selection decision
Choosing the particular securities to include in a portfolio.
Line representing the relationship between expected return and market risk.
A situation in which market participation is a negative signal.
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
A debt or equity security not classified as a held-to-maturity security or a trading security. Can be classified as a current or noncurrent investment depending on the intended holding period.
decision as to which real assets the firm should acquire.
A security that can be converted into common stock at the option of the security holder,
A type of active international management that measures the contribution to performance
Asset allocation in which the investor chooses among investments denominated in
A security representing a debt relationship with an enterprise, including a government
the process of choosing among the alternative
Method of representing alternative sequential decisions and the possible outcomes from these decisions.
Diagram of sequential decisions and possible outcomes.
an unknown item for which a linear programming
A financial security, such as an option, or future, whose value is derived in part from the
Employee Retirement Income Security Act of 1974 (ERISA)
A federal Act that sets minimum operational and funding standards for employee benefit
An ownership interest in an enterprise, including preferred and common stock.
security that grants the security holder the right to exchange the security for the
a judgment made regarding the method
decision as to how to raise the money to pay for investments in real assets.
decisions concerning the liabilities and stockholders' equity side of the firm's balance
A nonnegotiable debt security that can be redeemed at some fixed price or according to
A security that pays a specified cash flow over a
security paying dividends or interest that vary with short-term interest rates.
A debt security for which the investing entity has both the positive
The security to which a warrant is attached.
A convertible security whose optioned common stock is trading in a middle range, causing
a judgment about which assets will be
decisions concerning the asset side of a firm's balance sheet, such as the decision to
a decision that compares the cost of
decisions concerning the operation of the firm, such as the choice of firm size, firm
An easily traded investment, such as treasury bills, which is
Monthly income preferred security (MIP)
Preferred stock issued by a subsidiary located in a tax haven.
Mortgage pass-through security
Also called a passthrough, a security created when one or more mortgage
Mutually exclusive investment decisions
Investment decisions in which the acceptance of a project
A debt or equity security for which there is no posted price or bidand-
see make-or-buy decision
the second decision made in capital project evaluation in which projects are ranked according to their impact on the achievement of company objectives
An instrument such as a stock or bond for which payments depend only on the financial
the first decision made in evaluating capital
Piece of paper that proves ownership of stocks, bonds and other investments.
Either the collateral on a loan, or some type of equity ownership or debt, such
A share or an interest in a property or an enterprise such as a stock certificate or a bond.
Collateral offered by a borrower to a lender to secure a loan.
Security characteristic line
A plot of the excess return on a security over the risk-free rate as a function of
Security deposit (initial)
Synonymous with the term margin. A cash amount of funds that must be deposited
Security deposit (maintenance)
Related: Maintenance margin security market line (SML). A description of
Security Market Line
A graph illustrating the equilibrium relationship between the
security market line
Relationship between expected return and beta.
The monetary value placed on security by a lender in determining the extent to which it can make loans against such security.
Consequence of a contract that induces only one group (e.g. low risk individuals) to participate.
Social Security Act of 1935
A federal Act establishing Old Age and Survivor’s
special order decision
a situation in which management must determine a sales price to charge for manufacturing or service jobs outside the company’s normal production/service market
An active portfolio management technique that focuses on advantageous selection of
A debt or equity security bought and held for sale in the near term to generate income on short-term price changes.
Options: the security subject to being purchased or sold upon exercise of an option
Variable price security
A security, such as stocks or bonds, that sells at a fluctuating, market-determined price.
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