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Definition of Variance rule
Specifies the permitted minimum or maximum quantity of securities that can be delivered to
IRS rules used to allocate income on export sales to a foreign sales corporation.
Accept the project if IRR is greater than the discount rate; reject the project is lower than the
A statistical measure of the degree to which random variables move together.
An investment decision rule in which the cash flows are discounted at an
The requirement that all pool information, as specified under the PSA Uniform Practices, in a
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
Related: Markowitz efficient portfolio
Graph of the lowest possible portfolio variance that is attainable for a given
The portfolio of risky assets with lowest variance.
A technical trading strategy that combines mechanical rules, such as the CRISMA
An investment is worth making if it has a positive NPV. Projects with negative NPVs
Weighted sum of the covariance and variances of the assets in a portfolio.
SEC rule allowing qualified institutional buyers to buy and trade unregistered securities.
rule enacted in 1982 that permits firms to file shelf registration statements.
The covariance between a variable and the lagged value of the variable; the same as
SEC-imposed restrictions on when a short sale may be executed, intended to prevent investors
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
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.
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
Average value of squared deviations from mean. A measure of volatility.
Proposal that the money supply be increased at a steady rate equal approximately to the real rate of growth of the economy. Contrast with discretionary policy.
A formula for determining policy. Contrast with discretionary policy.
See monetarist rule.
Argument about whether policy authorities should be allowed to undertake discretionary policy action as they see fit or should be replaced by robots programmed to set policy by following specific formulas. See discretionary policy, policy rule.
Legislation under which interest, dividends, or capital gains earned on assets you transfer to your spouse will be treated as your own for tax purposes. Interest or dividends relating to property transferred to children under 18 also will be attributed back to you. The exception to this rule is that capital gains relating to property transferred to children under 18 will not be attributed back to you.
Rule of 72
This is a very important rule to know. The rule is that the number 72 divided by the rate of return of your investment equals the number of years it takes for your investment to double.
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