The semiannual interest payments are based on the inflation-adjusted principal at the time the interest is paid, and when the interest rate is applied to the adjusted principal value, the amount of the payment increases
DURATION always affects:
the longest bonds the most, and if all bonds are relatively the same (within months), the lowest coupon is affected the most.
ACID TEST RATIO =
TOTAL CURRENT ASSETS - INVENTORY ÷ TOTAL CURRENT LIABILITIES
CURRENT RATIO =
TOTAL CURRENT ASSETS ÷ TOTAL CURRENT LIABILITIES
a measurement of a stock or portfolio’s return independent of market related factors.
It is the return in excess of the expected return and is used to determine the value of a company’s management team or a portfolio manager
A stock or portfolio is assigned an expected return per:
the capital asset pricing module (CAPM).
CAPM uses beta to:
measure relative volatility and expected return compared to the market
If a stock or portfolio’s return equals this expected return, it is said to have an
alpha of __
BETA (also called the BETA COEFFICIENT) is a measurement of:
the volatility of a stock or portfolio compared to the volatility of the stock market as a whole, a stock within its industry, or a portfolio of stocks with an index to which it is similar
R-SQUARED refers to the volatility of stocks in relation to the:
market prices of those stocks.
DELTA is a volatility measurement used to compare:
option premium movements with the price movements of the stocks underlying the option contract
STANDARD DEVIATION is a statistical measurement of:
a range of volatility and not a measure of the volatility of the particular investment.
The SHARPE RATIO compares a stock’s:
risk-adjusted rate of return to its volatility.
The Sharpe ratio measures an investment’s return per unit of risk.
The CORRELATION COEFFICIENT is a:
statistical measure of the degree of how 2 investments are related.
It is a measure of volatility and can be used to comparethe performance of one investment with another.
An income statement lists:
the amounts received from selling goods and services, plus other items, and matches them against all the costs and outlays incurred to operate the company.
CASH FLOW is the:
amount of cash available to a company after the deduction of taxes, but with the addition of depreciation
When the increased return matches the increased risk, it is known as an: