The two components of investment returns.
What are income and appreciation?
These investors prefer a certain (more defined) return over a risky return with the same expected value.
Who are risk averse investors?
A measurement of an individual asset risk.
What is variance or standard deviation
Risk inherent to the market.
What is systematic risk?
Evaluates market activity based on historical returns, stock prices, and trading volume
What is technical analysis?
Return that has not been adjusted for inflation.
What is nominal return?
The simple mean of a set of holding period returns.
What is an arithmetic mean?
A measurement of the magnitude of the relationship between returns of two assets.
What is correlation?
An interest rate representing either the cost of capital or a treasury
What is a risk-free rate?
Process of measuring a security’s intrinsic value by evaluating all aspects of the business and economic market
What is fundamental analysis?
Pooled capital from numerous investors investing in real estate.
What is a REIT?
A dollar-weighted rate of return.
What is the internal rate of return?
Comparing risk-adjusted returns against a market index or other investments.
What is benchmarking?
According to this model, the expected return of an investment should be equal to the risk-free return plus a risk premium.
What is the capital asset pricing model (CAPM)?
Under this type of efficient market hypothesis, prices reflect all past market information only.
What is Weak Form?
These individuals help provide liquidity in the market and take on risk that other market participants may not want. Day Trading is an example.
Who is a speculator?
The rate that would make the net present value of a project equal to zero.
What is the internal rate of return?
An index that uses companies' market capitalization to value.
What is a value-weighted index?
A graphical representation of the capital asset pricing model.
What is the security market line?
This market anomaly states stocks that have performed well recently tend to continue performing well for a period of time.
What is Momentum Effect?
A cooperative association similar to a commercial bank where the members have something in common.
What is a credit union?
A time-weighted rate of return
What is the geometric rate of return?
A value-weighted index that includes the 3000 largest companies
What is the Russell 3000?
A measure of excess return per unit of systematic risk.
What is the Treynor ratio?
This behavioral finance term states that people dislike losses more strongly than they like equivalent gains.
What is Prospect Theory? Or Loss Aversion Accepted