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Definition of Variable
A value determined within the context of a model. Also called endogenous variable.
A random value that can take any fractional value within specified ranges, as
A random variable that can take only a certain specified set of discrete possible
A value determined within the context of a model.
A variable whose value is determined outside the model in which it is used. Also called
A random variable that has a normal probability distribution.
A function that assigns a real number to each and every possible outcome of a random experiment.
Annuity contracts in which the issuer pays a periodic amount linked to the investment
A cost that is directly proportional to the volume of output produced. When production is zero,
A whole life insurance policy that provides a death benefit dependent on the
A security, such as stocks or bonds, that sells at a fluctuating, market-determined price.
Short-term certificate of deposits that pay interest periodically on roll dates. On each roll
Floating rate bond that can be sold back periodically to the issuer.
Loan made at an interest rate that fluctuates based on a base interest rate such as the
Those that vary with the amount of goods you produce or sell. These may include utility bills, labor, etc.
Costs that have both fixed and variable components.
A cost that increases or decreases in proportion with increases or decreases in the volume of production of goods or services.
A method of costing in which only variable production costs are treated as product costs and in which all fixed (production and non-production) costs are treated as period costs.
Expenses that change with changes in either sales volume
an unknown item for which a linear programming
an unknown variable that is to be predicted
a variable that, when changed, will
a critical factor that management believes will
a variable used in a linear programming problem
a variable used in a linear programming problem that represents overachievement of a minimum requirement; it is associated with greater-than-or-equal-to constraints
a cost that varies in total in direct proportion
a cost accumulation and reporting method
variable cost ratio
the proportion of each revenue dollar
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 cost that changes in amount in relation to changes in a related activity.
Costs that change as the level of output changes.
A form of annuity policy under which the amount of each benefit is not guaranteed or specified. The amounts fluctuate according to the earnings of a separate investment account.
Ordinary least squares (OLS)
regression analysis a statistical technique that minimizes the sum of the squared deviations between a dependent variable and one or more independent variables and provides the user
Alternative mortgage instruments
Variations of mortgage instruments such as adjustable-rate and variablerate
The correlation of a variable with itself over successive time intervals.
Coefficient of determination
A measure of the goodness of fit of the relationship between the dependent and
The difference between variable revenue and variable cost.
A standardized statistical measure of the dependence of two random variables,
A statistical measure of the degree to which random variables move together.
Cumulative probability distribution
A function that shows the probability that the random variable will
Related: variable life
A guaranteed investment contract where the credit rating is tied to some variable
Interest rate swap
A binding agreement between counterparties to exchange periodic interest payments on
Inverse floating rate note
A variable rate security whose coupon rate increases as a benchmark interest rate declines.
Payment of a financial obligation later than is expected or required, as in lead and lag. Also, the number
The London Interbank Offered Rate; the rate of interest that major international banks in London
Log-linear least-squares method
A statistical technique for fitting a curve to a set of data points. One of the
A distribution where the logarithm of the variable follows a normal distribution.
A period of time in which all costs are variable; greater than one year.
A period of time in which all costs are variable; greater than one year.
The expected value of a random variable.
Errors in measuring an explanatory variable in a regression that leads to biases in
Used in charts and technical analysis, the average of security or commodity prices
The estimated relationship between a dependent variable and more than one explanatory variable.
Normal probability distribution
A probability distribution for a continuous random variable that is forms a
A representation that characterizes a part of a model (e.g. a growth rate), the value of which is
A variable that handles financial slack in the financial plan.
Probability density function
The probability function for a continuous random variable.
Also called a probability function, a function that describes all the values that the random variable can
R squared (R^2)
Square of the correlation coefficient proportion of the variability explained by the linear
A statistical technique that can be used to estimate relationships between variables.
An equation that describes the average relationship between a dependent variable and a
Regression toward the mean
The tendency for subsequent observations of a random variable to be closer to its mean.
1) Parts of stock returns not explained by the explanatory variable (the market-index return). They
The covariance between a variable and the lagged value of the variable; the same as
Simple linear regression
A regression analysis between only two variables, one dependent and the other explanatory.
Tactical Asset Allocation (TAA)
An asset allocation strategy that allows active departures from the normal
variables that are used to describe the market on a technical basis.
A measure of risk based on the standard deviation of investment fund performance over 3 years.
A method of costing in which all fixed and variable production costs are charged to products or services using an allocation base.
Also the difference between the selling price and variable costs, which can be expressed either per
The idea that fixed costs and variable costs react differently to changes in the volume of
Optimum selling price
The price at which profit is maximized, which takes into account the cost behaviour of fixed and variable costs and the relationship between price and demand for a product/service.
An approach to understanding how changes in one variable of costâ€“volumeâ€“profit analysis are affected by changes in the other variables.
An intermediate measure of profit equal to sales revenue
gross margin, or gross profit
This first-line measure of profit
Overhead generally refers to indirect, in contrast to direct,
Operating expenses that vary in proportion to
The profit per unit sold of a product after deducting product
A measure of the tendency of two variables to change values
The value of the possible outcomes of a variable weighted by the
A statistical term that measures the dispersion of a variable
a cost accumulation and reporting
a graph that depicts the relationships among revenues, variable costs, fixed costs, and profits (or losses)
the total variable cost of carrying one unit of
coefficient of correlation
a measure of dispersion that indicates the degree of relative association existing between two variables
the difference between selling price and
contribution margin ratio
the proportion of each revenue dollar remaining after variable costs have been covered;
an analytical technique that uses statistical
the practice of minimizing, to the extent
the relative composition of an organizationâ€™s
see variable costing
a technique used to determine the fixed
a number (prefaced as a multiplier
a mathematical programming technique in which all solutions for variables must be restricted to whole numbers
least squares regression analysis
a statistical technique that investigates the association between dependent and independent variables; it determines the line of "best fit" for a set of observations by minimizing the sum of the squares
a method of mathematical programming used to solve a problem that involves an objective function and multiple limiting factors or constraints long-term variable cost a cost that was traditionally viewed as a fixed cost
a cost that has both a variable and a fixed component;
a statistical technique that uses two or
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