When the value of a whole group of assets
exactly equals the sum of the values of the individual assets
that make up the group of assets. Or, the principle that the net
present value of a set of independent projects is just the
sum of the net present values of the individual projects.
Stocks with low price/book ratios
or price/earnings ratios. Historically, value stocks have enjoyed
higher average returns
than growth stocks (stocks
with high price/book or P/E ratios) in a variety of countries.
A mutual fund that emphasizes
stocks of companies whose growth
opportunities are generally regarded as subpar by the market.
A value stock company often pays regular dividend
income to shareholders
and sells at relatively low prices in relation to its earnings
or book value.
An element in a model. For example, in the model RS&Pt+1
= a + b Tbill t + et, where RS&Pt+1
is the return on the S&P in month t+1 and Tbill
is the Tbill return at month t, both RS&P and Tbill
are "variables" because they change through time; i.e.,
they are not constant.
A measure of dispersion of a set of data points around their
mean value. The mathematical expectation
of the average squared deviations from the mean.
The square root of the variance is the standard
deviation.
Stands for Venture Enhancement and Loan Development Administration
for Smaller Undercapitalized Enterprises. A federal agency that
buys and pools small business loans made by banks, and then issuessecurities that are bought
by large institutional
investors.
The number of times a dollar is spent, or turns over, in a specific
period of time. Velocity affects the amount of economic activity
generated by a given money supply.
An investment in a start-up business that is perceived to have
excellent growth prospects
but does not have access to capital
markets. Type of financing sought by early-stage companies
seeking to grow rapidly.
A partnership between a startup company and a brokerage firm
or entrepreneurial company that provides capital
for the new business in return for stock
in the company and a share of the profits.
Buying or taking over a firm in the same industry in which the
acquired firm and the acquiring
firm represent different steps in the production process.
Dividing each expense item
in the income statement
of a given year by net sales to identify expense items that rise
more quickly or more slowly than a change in sales.
A form of technical charting that shows the high, low, and closing
prices of a stock or a market
on each day on one vertical line with the closing price indicated
by a short horizontal mark.
Become applicable or exercisable. A term mainly used on the
context of employee stock ownership or option programs. Employees
might be given equity in a firm but they must stay with the firm
for a number of years before they are entitled to the full equity.
This is a vesting provision. It provides incentive for the employee
to perform.
Nonforfeitable ownership (or partial ownership) by an employee
of the retirement account balances or benefits contributed on
the employees behalf by an employer. The Tax Reform Act of 1986
established minimum vesting rights for employees based on their
years of service—full vesting in five years or 20% vesting
per year starting by the end of the third year.
A new optioncontract
introduced by the PHLX in 1994
that is settled in US dollars rather than in the underlying
currency. These options are also called 3-Ds (dollar-denominated
delivery).
A measure of risk based on the
standard deviation
of the asset return. Volatility
is a variable that appears
in option pricing formulas,
where it denotes the volatility of the underlying
asset return from now to the expiration of the option.
There are volatility indexes. Such as a scale of 1-9; a higher
rating means higher risk.
A note appearing on the consolidated
tape when the tape
is running behind under heavy trading,
meaning that only the stocksymbol
and price will be shown for trades
under 5000 shares.