Intro to Investments
Income and Appreciation
Stated rate that does no take compounding into effect
Nominal Rate
measurement of an individual risk
variance or stdev
Risk inherent to market
systematic risk
True/estimated value of a stock
intrinsic value
Day trading is an example of
Speculation
The simple mean of a set of holding period returns
Arithmetic mean
measures the magnitude of the relationship between returns of two assets
correlation or covariance
Rate for the cost of capital or treasury
risk free rate
measuring a security's intrinsic value by evaluation all aspects of business and economic market
Fundamental analysis
Pooled capital from numerous investors investing in real estate
REIT
Dollar weighted rate of return
Internal rate of return
comparing risk adjusted returns to market index or other investments
benchmarking
Expected return of an investment should equal the risk free return plus risk premium
CAPM
uses price trends, chart patterns, and moving averages to evaluate a company's value
technical analysis
Financial markets for securities that mature in less than one year
Money Markets
Rate that would make the net PV of a project = 0
Internal Rate of Return
index that uses market capitalization to value
value weighted index
graphical representation of the CAPM
security market line
All share pricing reflects available information
Efficient market hypothesis
A cooperative similar to a commercial bank where the members have something in common
credit union
time weighted rate of return
Geometric rate of return
value weighted index including 3000 largest companies
Russel 3000
measure of excess return per unit of systematic risk
Treynor ratio
Gives shareholders voting rights
Common stock