Quick reference items are fully complete for all Level I CFA® topics.
January effect
Calendar anomaly that during the first five trading days of January, stock returns are significantly higher than they are the rest of the year. This is an anomaly because in an efficient market, traders would exploit this by buying ahead, which pushes prices up, and selling at the end of it, pushing prices down. In doing so, the profit ...
Jensen’s Alpha
Jensen’s alpha is based on systematic risk, but market-adjusted. It is a measure of excess return based on the portfolio beta. Compare: Sharpe ratio, Treynor ratio, M2
Joint hypothesis test
LEVEL II A joint hypothesis test is an F-test to evaluate nested models, which consist of a full or unrestricted model, and a restricted model. The F-statistic is calculated using the formula shown. The null hypothesis would be that all coefficients of the excluded variables are equal to zero, and the null that at least one of the excluded coefficients ...
Joint probability
The probability of the joint occurrence of stated events. P(AB) or P(A⋂B) See also: Multiplication rule
Joint probability table
The probability of joint occurrences of values of stated random variables laid out in a table.
Just-in-time
Manufacturer makes only what is needed, only when it is needed, and only in the amount that is needed. The goal of the system is to minimise the stocking up of raw materials, by receiving goods only as they are needed in the manufacturing process. Such an approach reduce wastage, thereby reducing the cost of inventory. Importantly, manufacturers must ...
Justified P/E
The intrinsic P/E ratio of a company based on the present value of its future cash flows. This is derived from the Gordon Growth Model.
