Investments: Analysis and Management, 12th Edition

Glossary

A

Abnormal Return Return on a security beyond that expected on the basis of its risk

Active Management Strategy A strategy designed to provide additional returns by trading activities

Advance-Decline Line A technical analysis measure that relates the number of stocks rising to the number declining

Alpha The difference between an independently determined expected rate of return on a stock and the required rate of return on that stock.

American Depository Receipts (ADRs) Securities representing an ownership interest in the equities of foreign companies

Arbitrage Pricing Theory (APT) An equilibrium theory of expected returns for securities involving few assumptions about investor preferences

Arbitrageurs Investors who seek discrepancies in security prices in an attempt to earn riskless returns

Asset Allocation Decision The allocation of a portfolio's funds to classes of assets, such as cash equivalents, bonds, and equities

Asset-Backed Securities (ABS) Securities issued against some type of asset-linked debts bundled together, such as credit card receivables or mortgages

Average Annual Total Return A hypothetical rate of return used by mutual funds that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period

Average Tax Rate Total tax divided by taxable income

B

Balance Sheet A summary of a company's assets, liabilities, and owner's equity at a specific point in time

Bar Chart A plot of daily stock ...