Vocab Flashcards
Absolute frequency
Number of times a data value occurs within a distribution
Annual percentage rate (APR)
Contracted rate plus any non interest finance charges expressed on an annual basis
Annuity
Any investment with a sequence of periodic payments made at equal intervals of time over a specified term
Arithmetic mean
Some of numbers divided by number of numbers, (u)
Balloon.
Payment
Any payment to principle over and above the regular payment
Best fit regression line
The regression lined that minimizes the sum of the squared errors by the least squares method
Bimodal
Refers to a distribution with two modes
Bivariate regression analysis
The calculation of a straight line that best summarizes an assumed underlying linear relationship between variables
Bonus
The portion of the face value of a mortgage loan that exceeds the funds actually received by the borrower and is intended as an additional compensation for the lender
Book value
The original face value of the mortgage less the amount of principal repayment or the mortgage amount outstanding at a particular appointment time. At origination, book and face values are the same.
Capitalization
Changing a stream of income to a capital market value (current market value) using a required rate of return
Capitalization rate
The return and investor requires for investing in a property to receive the annual net operating income flow. It can be estimated from similar properties by dividing their estimated net operating incomes by the prices at which the properties sell.
Cluster sampling
A sampling procedure in which population is divided into groups, some of which are randomly selected for anaysyis; same as area sampling
Coefficient of determination
Indicates how well a regression model explains the variation in the dependent variable. Equals the linear correlation coefficient squared
Coefficient of dispersion
Expresses the average absolute deviation as a percentage of the median; the most commonly used measure of uniformity in mass assessment
Coefficient of variation
A measure designed to allow comparisons between the standard deviations of two datasets
Convenience sampling
A sampling procedure where the criterion for inclusion is the convenience of the sampler
Cost of funds advanced (COFA)
The rate of interest charged on the mortgage loan amount after all fees have been deducted
Cross section data
Data on one or more variables taken from the same time period
Cross tabulation analysis
Technique of data analysis in which a table is constructed showing the number of observations in the dataset that have given values for each of the two variables
Debt financing
Incurring an obligation to repay a debt in order to invest or consume more than one currently owns
Debt servicing
The making of mortgage payments by the borrower as arranged with the lender
Differed annuity
Where the cash flow has all the characteristics of an annuity , but where the present value is calculated for some point in advance of the beginning of the first payment period
Discreet variable
A variable that can assume only a limited number of values such as whole number
Discount loan
Alone on which payments are determined by the face value but where the borrower receives a lesser amount
Discount rate
The interest rate used to determine the present value of future cash flows
Discounted cash flows
A method of valuing an asset using the concepts of time value of money where future cash flows are discounted to give a present value
Effective annual interest rate
Annual interest rate compounded once a year denoted as j
Error
The actual value of the dependent variable.Minus the predicted value of the dependent variable for any given observation
Equivalent rate
Two interest rates are equivalent if for the same amount of borrowed over the same period of time the same amount is owed at the end of that period of time
F value
Measures whether the overall regression relationship is significant, also known as f statistic
Fee simple
The legal term for the maximum interest in land available to a person, or the maximum of legal ownership. Equivalent in many ways for practical purposes to absolute ownership
Final payment
The last installment made on a fully emerged loan usually smaller than the preceding periodic payments
Frequency distribution
A listing of data values accompanied by the number of times each value occurs
General anuity due
And annuity with payments due at the beginning of the payment period and a payment period not identical to the interest compounding period
Eg: car lease
Graphic method
A method in which the best fit regression line is determined by plotting the data And then subjectively choosing a line that appears to fit the data best
Histogram
A graph of the relationship between data values for group data and their frequencies for the group data
Holding period
Length of time of an investment and or loan
Index number
A measure of how variable or variables change over time
Interest adjustment
The process of calculating compound interest payable on the amount borrowed between the day the moneys are advanced and the day the amortization period starts
Internal rate of return
The discount rate.At which the present value of all future cash flows equals the initial investment
Irregular variation
Fluctuations occurring through time that are completely unpredictable and sporadic
Lending value
The estimated value of a property for lending purposes.It is a long term conservative estimate of the value of the security as determined by the lender and therefore does not necessarily equal market value or sale price
Linear correlation coefficient
A measure of the strength of the relationship between 2 variables.The coefficient denoted as r varies between -1 (negative correlation) and +1 (positive correlation). A coefficient of zero indicates the variables are uncorrelated
Market value of a property
Expected or forecasted sale price
Market value of an offer
Today’s cash equivalent price
Mean absolute deviation
Measures the average spread or difference between a ratio and the median ratio (used in assessment)
Measure of central tendency
A measure that can be used as a typical value
Measure of dispersion
A measure that indicates how spread out of distribution is
Median
A measure of central tendency given by the middle value or the mean of the two middle values when the data are arranged in ascending or descending order
Mode
A measure of Central tendency given by the most frequent value.If all values occur with equal frequency , there is no mode
Moving average
A series of arithmetic means used to smooth time series data.
Moving total
A series of totals or sums of data from consecutive time periods used to compute a moving average
Multicollinearity
When two or more of the elements in a regression model are moderately or highly correlated
Net present value
The difference between the present value of all future cash flows and the cost of the investment
Multivariate regression analysis
Regression analysis in which there is one dependent variable and more than one independent variable
Nominal interest rate
An interest rate quoted as per annum with a stated compounding frequency , it is equal to the interest Rate per compounding period multiplied by the number of compounding periods
Non response error
Errors due to the different characteristics of respondents and non respondents
Normal distribution
Distribution of data that a symmetric around the mean it is bell shaped and has a single peak
Ordinary general annuity
An annuity with payments due at the end of the payment period and a payment period not identical to the interest compounding period
Eg: mortgage
Ordinary simple annuity
An annuity in which payments are due at the end of the payment period and the payment interval is identical to the
Interest compounding period
Eg: car loan
periodic rate
The interest rate that is charged per compounding period EG per month denoted as i
Present value ratio
Present value of net cash flows divided by the cost of the investment
Price related differential
Measures appraisal regressivity or progressivity calculated by dividing the mean of the ASRs by the aggregate ratio
Profitability index
Present value of positive cash flows divided by present value of negative cash flows
Quantity Index
An index to compare the quantities of one or more products over two time periods
Quota sampling
A sample in procedure were a specified number of elements in each strata or group is selected
Range
A measure of dispersion given by the maximum minus the minimum
Relative frequency
The number of times each data value occurs within a distribution divided by the total number of data values
Residual method
A technique for determining the typical variation based on comparison of actual and predicted trend values
Sale/leaseback
Situation in which the vendor will lease the subject property back from the purchaser
Sample bias
Errors arising in a sampling process
Seasonal index
Actual value divided by mean value expressed as a percentage
Secular trend
A long running pattern in time series data
Simple anuity due
An annuity with payments due at the beginning of the payment period and a payment interval identical to the interest compounding period
Eg: car lease (when stated annually)
Sinking fund
A reserve established by setting aside revenue to fund a future capital expense or repay long term debt obligations eg. Principle on interest only loan.
Standard deviation
A measure of dispersion of a distribution around its mean
Standard error of the estimate
A measure of the average disparity between the actual and predicted values of the independable variables.It is a measure of how good the best fit regression line is
Standard error of the mean
A measure of dispersion in the distribution of means of random samples that are the same size and are drawn from the same population
Stratified random sampling
A sampling method where the elements of the population are first stratified , then a sample is selected from each of the strata using a random sampling technique
Summary measure
A single number or measure that summarizes the distribution without listing every value
Systematic sampling
Assampling procedure where every nth item in the population is chosen
T-statistic
Indicates the degree of confidence that can be placed on the regression coefficients
Time series data
Data on one or more variables taken from one or more time periods
Treasury bill
A short term promissory note issued by the Government of Canada to finance ongoing expenditures in excess of current tax revenues
Trend
A regular pattern and time series data
Value index
An index to compare the value of several products over two time periods
Variance
A measure of dispersion of a distribution around it’s mean; the square of the standard deviation
Vendor supplied mortgage or take back mortgage
Where a vendor sells their home with a portion of the purchase price paid with the mortgage
Reversionary value
Value when property reverts to owner after lease
Coupon bonds
Bonds that pay interest only at coupon rate and principal at maturity.
Agreement for sale
Rent to own. Buyer holds title charge. Seller holds title
Interest rate buy down
$500,000 at 5% becomes $550,000 at 2.6% but the buyer only receives 500,000
Lender bonus
Fee charged to increase value of loan. Usually realized as having a higher face value than what the borrower receives.
