Investment Performance Measures

studied byStudied by 0 people
0.0(0)
learn
LearnA personalized and smart learning plan
exam
Practice TestTake a test on your terms and definitions
spaced repetition
Spaced RepetitionScientifically backed study method
heart puzzle
Matching GameHow quick can you match all your cards?
flashcards
FlashcardsStudy terms and definitions
Get a hint
Hint

Overall Performance Measure

Get a hint
Hint

Summarizes past investment performance

Get a hint
Hint

Weighted Average Cost of Capital

Get a hint
Hint

Calculated based on market values for components

1 / 22

encourage image

There's no tags or description

Looks like no one added any tags here yet for you.

23 Terms

1

Overall Performance Measure

Summarizes past investment performance

New cards
2

Weighted Average Cost of Capital

Calculated based on market values for components

New cards
3

Percentage Return Calculation

Method: divide $ return by investment's beginning value

New cards
4

Average Monthly Return

Calculated as the mean of monthly returns

New cards
5

Risk Ranking

Order from least to most risky assets

New cards
6

Total Risk Definition

Portion of risk attributable to firm or industry factors

New cards
7

Risk-Return Relationship Ranking

Ordering stocks based on return and standard deviation

New cards
8

Diversifiable Risk

Part of total risk reducible through diversification

New cards
9

Portfolio Return Calculation

Weighted sum of individual asset returns in a portfolio

New cards
10

Portfolio Weights Calculation

Individual stock weight in a portfolio

New cards
11

Expected Return Calculation

Weighted sum of returns based on probabilities

New cards
12

Market Risk Premium

Reward for taking systematic stock market risk

New cards
13

Company's Required Return Calculation

Based on beta, market return, and risk-free rate

New cards
14

Asset Pricing Theory Basis

Relies on beta as a measure of market risk

New cards
15

Efficient Market Hypothesis

States security prices reflect expected return

New cards
16

Behavioral Finance Study

Focuses on biases in financial decision-making

New cards
17

Expected Return Calculation (Equation 10.6)

Formula: D1/P0 + growth rate

New cards
18

Executive Stock Options

Special rights to buy company shares at a fixed price

New cards
19

Component Cost of Preferred Stock

Calculated as coupon rate divided by price

New cards
20

Cost of Equity Calculation

Based on beta, risk-free rate, and market return

New cards
21

Component Cost of Debt Calculation

Before and after-tax costs based on bond details

New cards
22

Firm's Value-Adding Project Analysis Start

Begins with current capital structure and costs

New cards
23

Firm's Cost of Capital Basis

Determined by weighted average of debt and equity costs

New cards

Explore top notes

note Note
studied byStudied by 168 people
640 days ago
5.0(3)
note Note
studied byStudied by 1 person
810 days ago
5.0(1)
note Note
studied byStudied by 88 people
703 days ago
5.0(2)
note Note
studied byStudied by 44 people
1006 days ago
5.0(3)
note Note
studied byStudied by 4 people
313 days ago
5.0(1)
note Note
studied byStudied by 31 people
706 days ago
5.0(1)
note Note
studied byStudied by 5 people
756 days ago
5.0(2)
note Note
studied byStudied by 17 people
977 days ago
5.0(1)

Explore top flashcards

flashcards Flashcard (47)
studied byStudied by 4 people
726 days ago
5.0(1)
flashcards Flashcard (36)
studied byStudied by 1 person
785 days ago
5.0(1)
flashcards Flashcard (21)
studied byStudied by 1 person
652 days ago
5.0(1)
flashcards Flashcard (36)
studied byStudied by 1 person
788 days ago
5.0(1)
flashcards Flashcard (40)
studied byStudied by 4 people
569 days ago
5.0(1)
flashcards Flashcard (78)
studied byStudied by 35 people
68 days ago
5.0(1)
flashcards Flashcard (45)
studied byStudied by 103 people
853 days ago
5.0(3)
flashcards Flashcard (44)
studied byStudied by 14 people
404 days ago
5.0(1)
robot