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Definition of Zero-investment portfolio
A portfolio of zero net value established by buying and shorting component
A strategy that uses available information and forecasting techniques to seek a
The use of capital to create more money through the addition of fixed assets or through income producing vehicles.
Refers to various techniques and procedures
Money used to purchase fixed assets for a business, such as land, buildings, or machinery. Also, money invested in a business on the understanding that it will be used to purchase permanent assets rather than to cover day-to-day operating expenses.
The entire portfolio, including risky and risk-free assets.
Related: cash flow matching.
Automatic reinvestment of shareholder dividends in more shares of a
A portfolio that provides the greatest expected return for a given level of risk (i.e. standard
Through equity investment, investors gain part ownership of the corporation. The primary type of equity investment is corporate stock.
The difference between the return on the market portfolio and the
The return one can expect to earn on an investment. See: capital asset
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.
The acquisition abroad of physical assets such as plant and equipment, with
Future investment opportunities
The options to identify additional, more valuable investment opportunities
guaranteed investment certificate (GIC)
A GIC is an investment that gives you a guaranteed rate of return over a fixed period of time, usually between 30 days and 5 years. GICs are available from banks, trust companies, and other financial institutions.
Guaranteed investment contract (GIC)
A pure investment product in which a life company agrees, for a
A portfolio consisting of the long position in the stock and the short position in the call
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 commitment of funds (capital) in anticipation of an increased
Related: financial analysts
Financial intermediaries who perform a variety of services, including aiding in the sale of
Middleman between a corporation issuing new securities and the public. The middleman buys the securities issue outright and then resells it to customers. Also called an underwriter.
a responsibility center in which the manager
A division or unit of an organization that is responsible for achieving an adequate return on
a judgment about which assets will be
Decisions concerning the asset side of a firm's balance sheet, such as the decision to
Bonds rated Baa or above by Moody’s or BBB or above by Standard & Poor’s.
Investment grade bonds
A bond that is assigned a rating in the top four categories by commercial credit
The revenue from a portfolio of invested assets.
Also called a portfolio manager and money manager, the individual who manages a
Investment product line (IPML)
The line of required returns for investment projects as a function of beta
Expenditures on capital goods including new housing. Financial ''investments" and sales of existing assets are not included.
Investment tax credit
Proportion of new capital investment that can be used to reduce a company's tax bill
Investment Tax Credit
A reduction in taxes offered to firms to induce them to increase investment spending.
A closed-end fund regulated by the investment Company Act of 1940. These funds have a
As a discipline, the study of financial securities, such as stocks and bonds, from the investor's
investments that a regulated entity is permitted to make under the rules and regulations
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
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.
The total of all investment opportunities available to the investor.
Markowitz efficient portfolio
Also called a mean-variance efficient portfolio, a portfolio that has the highest
Markowitz efficient set of portfolios
The collection of all efficient portfolios, graphically referred to as the
Mean-variance efficient portfolio
Related: Markowitz efficient portfolio
The portfolio of risky assets with lowest variance.
Modern portfolio theory
Principles underlying the analysis and evaluation of rational portfolio choices
Mutually exclusive investment decisions
investment decisions in which the acceptance of a project
Gross, or total, investment minus depreciation.
investment spending minus depreciation.
Net present value of future investments
The present value of the total sum of NPVs expected to result from
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 investment management
Buying a well-diversified portfolio to represent a broad-based market
Passive investment strategy
See: passive management.
A market index portfolio.
Passive portfolio strategy
A strategy that involves minimal expectational input, and instead relies on
A collection of investments, real and/or financial.
A collection of securities and investments held by an investor
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
Related: investment management
Related: investment manager
Portfolio opportunity set
The expected return/standard deviation pairs of all portfolios that can be
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.
The percentage of a total portfolio represented by a single specific
the process of gathering information
qualified investments (Canada)
Qualified investments is the term used for investments that can be held in an RSP. These investments generally include:
Regular Investment Plan (RIP)
A plan under which you may make regular deposits of the same amount to your Mutual Funds account once a month, once every 2 weeks, or once a week. You can also make regular deposits up to four times a month on any dates you choose.
an assumption made about the rates of return that will be earned by intermediate cash flows from a capital project; NPV and PI assume reinvestment at the discount rate; IRR assumes reinvestment at the IRR
The rate at which an investor assumes interest payments made on a debt security can be
The risk that proceeds received in the future will have to be reinvested at a lower potential
REIT (real estate investment trust)
Real estate investment trust, which is similar to a closed-end mutual
REMIC (real estate mortgage investment conduit)
A pass-through tax entity that can hold mortgages
A portfolio constructed to match an index or benchmark.
return on investment
a ratio that relates income generated
Return on investment (ROI)
Generally, book income as a proportion of net book value.
RETURN ON INVESTMENT (ROI)
In its most basic form, the rate of return equals net income divided by the amount of money invested. It can be applied to a particular product or piece of equipment, or to a business as a whole.
Return on investment (ROI)
The net profit after tax as a percentage of the shareholders’ investment in the business.
return on investment (ROI)
A very general concept that refers to some
Short-term investment services
Services that assist firms in making short-term investments.
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
The mirror image of the asset substitution problem, wherein stockholders refuse
Unit investment trust
Money invested in a portfolio whose composition is fixed for the life of the fund.
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
Regional bank account to which just enough funds are transferred daily to pay each day’s bills.
Zero-balance account (ZBA)
A checking account in which zero balance is maintained by transfers of funds
a comprehensive budgeting process
A method of budgeting that ignores historical budgetary allocations and identifies the costs that are necessary to implement agreed strategies.
A portfolio constructed to represent the risk-free asset, that is, having a beta of zero.
Zero coupon bond
Such a debt security pays an investor no interest. It is sold at a discount to its face price
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