E, F, G, H, I Flashcards
Effi cient frontier
A set of optimal portfolios that match a
client’s expected returns with their tolerance
for risk.
End values
Represents the ends toward which a person
strives and infl uences how a person acts
today to achieve tomorrow’s goals
Endowment funds
Portfolios that are managed to produce
income for a beneficiary organization.
Enhanced active equity investing
An active portfolio management technique
where the manager overweights the
securities that are expected to outperform
the benchmark and underweights the
securities that are expected to
underperform, using short selling if
necessary
Enhanced indexing
An indexing technique that results in
portfolios that are designed to provide
index-like performance with some excess
return net of costs
Ethical dilemma
Exists when two or more of the possible
choices pit different values against each
other
Ethical principles
Help guide behaviour in situations where
no regulation exists or applies.
Ethics
A set of consistent values that guide
individual behaviour.
Event-driven strategy
A hedge fund strategy that seeks to profit
from unique events such as mergers,
acquisitions, stock splits and buybacks.
Execution slippage
Occurs when the execution of a transaction
causes subsequent prices to worsen.
Exempt investors
Investors who do not require a fi rm to sell
them securities via a prospectus.
Exempt market dealer
A dealer who trades or advises in the
exempt market, such as private placements
Fairness policy
A policy that all investment management
firms should have outlining the way
employees with the firm will deal with clients in matters of making and providing
investment analysis, recommendations or
trade services. The policy ensures that all
clients are treated fairly by the firm’s
employees.
Fiduciary
In a fiduciary relationship, the person in
whom trust has been placed.
Fiduciary duty
The duty of a person in a position of trust
to act solely in the interest of the
benefi ciary
Financial engineering
The process of combining traditional or
alternative investments with fi nancial
derivatives
Financial intermediaries
The various companies and organizations
that connect and move capital between
suppliers and users of capital.
Financial intermediation
The movement of funds from suppliers of
capital to users of capital.
Financial Transactions and Reports
Analysis Centre of Canada
(FINTRAC)
A federal agency created to gather financial
information under the Proceeds of Crime
(Money Laundering) and Terrorist Financing
Act.
Foreign-denominated bonds
Bonds issued by domestic or foreign
corporations or governments offering
diversification from interest-rate and
currency risk.
Forward rate agreements (FRAs)
Over-the-counter contracts for hedging
interest rates
Fund accounting
The proper accounting of the fund’s asset
values.
Fund of hedge funds (FoHF)
A portfolio of hedge funds overseen by a
manager who determines which hedge
funds to invest in and how much to invest
in each.
Fundamental indexing
A methodology where each stock’s index weighting is determined by four fundamental measures, thus diluting weighting errors and erasing the link between portfolio weight and over- or undervaluation.
