Podcast
Questions and Answers
Price-to-Earnings Ratio (P/E) — The number by which expected earnings per share is multiplied to estimate a stock's value; also called the earnings ______.
Price-to-Earnings Ratio (P/E) — The number by which expected earnings per share is multiplied to estimate a stock's value; also called the earnings ______.
multiplier
Small Firm Effect — A frequent empirical anomaly where risk-adjusted stock returns for companies with low market capitalization are significantly larger than those generated by high market ______.
Small Firm Effect — A frequent empirical anomaly where risk-adjusted stock returns for companies with low market capitalization are significantly larger than those generated by high market ______.
capitalization
Balance sheet — A financial statement that shows what assets the firm controls at a fixed point in time and how it has financed these ______.
Balance sheet — A financial statement that shows what assets the firm controls at a fixed point in time and how it has financed these ______.
assets
Common-size statements — The normalization of balance sheet and income statement items to allow for more meaningful comparison of different-sized ______.
Common-size statements — The normalization of balance sheet and income statement items to allow for more meaningful comparison of different-sized ______.
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DuPont system — A method of examining ROE by breaking it down into three component parts: (1) profit margin, (2) total asset turnover, and (3) financial ______.
DuPont system — A method of examining ROE by breaking it down into three component parts: (1) profit margin, (2) total asset turnover, and (3) financial ______.
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Anomalies are security price relationships that appear to contradict the efficient market hypothesis.
Anomalies are security price relationships that appear to contradict the efficient market hypothesis.
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EBITDA — Earnings before interest, taxes, depreciation, and ______.
EBITDA — Earnings before interest, taxes, depreciation, and ______.
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Arbitrage is a trading strategy designed to generate a guaranteed profit from a transaction that requires no capital commitment or risk bearing on the part of the trader. A simple example of an arbitrage trade would be the simultaneous purchase and sale of the same security in different markets at different prices.
Arbitrage is a trading strategy designed to generate a guaranteed profit from a transaction that requires no capital commitment or risk bearing on the part of the trader. A simple example of an arbitrage trade would be the simultaneous purchase and sale of the same security in different markets at different prices.
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Arbitrage Pricing Theory (APT) posits that the expected return to a financial asset can be described by its relationship with several common risk factors. The multifactor APT can be contrasted with the single-factor CAPM.
Arbitrage Pricing Theory (APT) posits that the expected return to a financial asset can be described by its relationship with several common risk factors. The multifactor APT can be contrasted with the single-factor CAPM.
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Capital Asset Pricing Model (CAPM) is a theory concerned with deriving the expected or required rates of return on risky assets based on the assets’ systematic risk relative to a market portfolio.
Capital Asset Pricing Model (CAPM) is a theory concerned with deriving the expected or required rates of return on risky assets based on the assets’ systematic risk relative to a market portfolio.
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Growth Stock is a stock issue that generates a higher rate of return than other stocks in the market with similar risk characteristics.
Growth Stock is a stock issue that generates a higher rate of return than other stocks in the market with similar risk characteristics.
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January Effect is a frequent empirical anomaly where risk-adjusted stock returns in the month of January are significantly larger than those occurring in any other month of the year.
January Effect is a frequent empirical anomaly where risk-adjusted stock returns in the month of January are significantly larger than those occurring in any other month of the year.
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