Terms in this set (10)
In the case of a debt security, the annual interest is always fixed as a percentage of the par value and doesn't fluctuate when the market price of the security changes.
Yield to maturity
This would only apply to debt securities because they have a loan principal that is to be paid back at some future date.
This is a bond's IRR.
The estimate of probable returns an investment may yield
Holding period return
This is the total return over a specified period.
This is not an annualized return.
It is the percentage return over a defined period.
Real rate of return
Returns that have been adjusted for inflation.
To determine the inflation-adjusted rate of return of a debt security, reduce its nominal return by the inflation rate as reflected in the consumer price index.
To determine the inflation-adjusted rate of return of an equity security, reduce the total return by the inflation rate as reflected in the consumer price index.
Internal rate of return (IRR)
This is the preferred method of measuring the return on DPP.
This takes into consideration the time value of money.
This is the way the yield to maturity of a bond is computed.
Generally of more use than dollar-weighted returns to evaluate portfolio manager performance
Generally of more use than time-weighted returns to evaluate individual investor performance
Large Cap - S&P 500
Mid Cap - S&P 400
Small Cap - Russell 2000
International stocks - EAFE
Dow Jones Industrial Average
Only major benchmark that is priced weighted.
YOU MIGHT ALSO LIKE...
Series 7 Top-Off Exam Preparation | Knopman Marks Guide
CH 5 Investment Review
INVEST TEST 1
OTHER SETS BY THIS CREATOR
Retirement plans and educational funding programs
Portfolio Management styles, strategies, and techniques
THIS SET IS OFTEN IN FOLDERS WITH...
Type of Client