Glossary

Traders specify when an order should be executed. Most orders are day orders, meaning they expire if unfilled by the end of the trading day.  Good til canceled orders last until they are filled or when the trader cancels the order.  Immediate-or-cancel orders are canceled unless they can be filled immediately. Good-on-close orders are only filled at the end of ...

Deferred tax assets can be adjusted with valuation allowance to reflect the probability that the reversal may not be realised in future periods. (e.g. Valuation allowance adjustment can be used to reflect probability that a tax loss carry forward will not be realised in the future) Some management may use valuation allowance to manipulate earnings. Decreasing a valuation allowance will ...

Used in equity analysis to evaluate a company’s performance and to value its shares They include: P/E ratio, P/CF ratio, P/S ratio, P/B ratio, Basic EPS, Diluted EPS, Cash flow per share, Dividend payout ratio, Retention rate, Sustainable growth rate

A measure of the size of the minimum value of losses expected during a specified time period at a given level of probability.  A VaR measure contains three elements: a time period, a minimum loss amount stated in units of currency,  and a probability.   For example, a bank can have a one-day VaR of $2 million, with a 5% ...

Besides fixed costs, the cost structure of a firm also consists of variable costs,  which fluctuate with the level of production and sales. Examples include cost of raw materials, shipping charges, wages for hourly employees, and sales commissions.

σ2(X) = ∑P(Xi) [Xi-E(X)]2

LEVEL II The Variance Inflation Factor (VIF) is a measure of how much the variance of an estimated regression coefficient is increased due to multicollinearity in the model. It is used to identify correlated independent variables in a multiple regression model. We start by regressing each of the independent variables against the remaining independent variables. The R-squared from the regression ...

Goods that increase in desirability with increasing price. Compare: Giffen good

A type of private equity fund that invest in companies in the early stages of their development. The investment often is in the form of equity but can be in convertible preferred shares or convertible debt. Categorisation of venture capital investments is based on the company’s stage of development. Terminology used to identify venture firm investment at different stages of ...

A trade restriction where the exporting country agrees to limit its exports of the good to its trading partners to a specific number of units. See also: Tariffs, Quotas, Export Subsidies