Common Terms Flashcards
Annuity
Series of payments in equal time periods guaranteed for a time period
Constant Perpetuity
A constant stream of identical cash flows without end
Growing Perpetuity
A constant stream of cash flows without end that is expected to rise indefinitely
Security
An umbrella term for an investment you can buy or sell
Examples include: stocks, bonds, mutual funds, exchange traded funds, etc.
Correlation
A measure of how two securities move in relation to each other
Coupon Rate
Interest received by a bond investor
(Interest/Par Value)100
Current Yield
The coupon from a bond divided by the market price of the bond, expressed as a percentage
(Interest/Current market price of bond)100
Par Value
The amount returned to the bond investor by the issue on maturity
Variance
The measurement of how far each number in the set is from the mean and from every number in the set
Covariance
Measure of the variance of two random variables that are in the same time period
Discount Factor
The percentage rate required to calculate the present value of a future cash flow
Moving Average
Average of the time-series data from consecutive time periods
R-Squared
Statistical term indicating how good one term is at predicting another
Higher value predicts one term from another better
Regression Analysis
Method that can be used in Excel to analyze the relationship between a dependent and independent variable
Standard Deviation
A measure of how far a set of data is from the average
