|Single index model
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Definition of Single index model
Single index model
A model of stock returns that decomposes influences on returns into a systematic factor,
Related: market model
Abramsâ€™ model for calculating DLOM based on the interaction of discounts from four economic components.
present value of a perpetuity with growth.
Abramsâ€™ model to calculate discount rates as a function of the logarithm of the value of the firm.
model for calculating DLOM for minority interests r the discount rate
Yield curve option-pricing models.
Also known as a trading index (TRIN)= (number of advancing issues)/ (number of declining
A model for determining the required rate of return on an asset.
A model, such as the Capital Asset Pricing model (CAPM), that determines the required
An option pricing model in which the underlying asset can take on only two
A model for pricing call options based on arbitrage arguments that uses
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
An economic theory that describes the relationship between risk and
Also called the Gordon-Shapiro model, an application of the dividend discount
The CPI, as it is called, measures the prices of consumer goods and services and is a
Liability-matching models that assume that the liability payments and the asset cash
Discounted dividend model (DDM)
A formula to estimate the intrinsic value of a firm by figuring the
Dividend discount model (DDM)
A model for valuing the common stock of a company, based on the
Dividend growth model
A model wherein dividends are assumed to be at a constant rate in perpetuity.
The European, Australian, and Far East stock index, computed by Morgan Stanley.
Also called indexing plus, an indexing strategy whose objective is to exceed or replicate
Extrapolative statistical models
models that apply a formula to historical data and project results for a
A way of decomposing the factors that influence a security's rate of return into common and
Garmen-Kohlhagen option pricing model
A widely used model for pricing foreign currency options.
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
This relationship is sometimes called the single-index model. The market model says that the
Market value-weighted index
An index of a group of securities computed by calculating a weighted average
The process of creating a depiction of reality, such as a graph, picture, or mathematical
Optimization approach to indexing
An approach to indexing which seeks to Optimize some objective, such
Pie model of capital structure
A model of the debt/equity ratio of the firms, graphically depicted in slices of
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 country fund
A mutual fund that invests in individual countries outside the United States.
Single factor model
A model of security returns that acknowledges only one common factor.
Simple linear trend model
An extrapolative statistical model that asserts that earnings have a base level and
A bond that will make only one payment of principal and interest.
Single-premium deferred annuity
An insurance policy bought by the sponsor of a pension plan for a single
Liability-matching models that assume that the liability payments and the asset cash flows
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
A measure of the excess return per unit of risk, where excess return is defined as the
Black's zero-beta version of the capital asset pricing model.
Two-state option pricing model
An option pricing model in which the underlying asset can take on only two
Value-at-Risk model (VAR)
Procedure for estimating the probability of portfolio losses exceeding some
Yield curve option-pricing models
models that can incorporate different volatility assumptions along the
See cash value added.
Capital Asset Pricing Model (CAPM)
A model for estimating equilibrium rates of return and values of
A method for determining the profitability of an investment. It is
Internet business model
a model that involves
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
A method of pricing options or other equity derivatives in
The first complete mathematical model for pricing
A model for selecting an optimum investment portfolio,
capital asset pricing model (CAPM)
Theory of the relationship between risk and return which states that the expected risk
constant-growth dividend discount model
Version of the dividend discount model in which dividends grow at a constant rate.
dividend discount model
Computation of todayâ€™s stock price which states that share value equals the present value of all expected future dividends.
Measure of the investment performance of the overall market.
percentage of sales models
Planning model in which sales forecasts are the driving variables and most other variables are
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.
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.
Single-level bill of material
A list of all components used in a parent item.
Using a single supplier as the only source of a part.
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.
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)
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.
The adjustment of benefits to compensate for the effects of inflation.
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