ARA

Similar financial terms

Zabara
The zabara applies mainly to international equities. Japanese securities transactions conducted on the principal of auction, i.e., (a) price priority in which the selling (buying) order with the lowest (highest) price takes precedence over other orders, and (b) time priority in that an earlier order takes precedence over other orders at the same price.

Two-fund separation theorem
The theoretical result that all investors will hold a combination of the risk-free asset and the market portfolio.

Separation theorem
The value of an investment to an individual is not dependent on consumption preferences. All investors will want to accept or reject the same investment projects by using the NPV rule, regardless of personal preference.

Separation property
The property that portfolio choice can be separated into two independent tasks: (a) determination of the optimal risky portfolio, which is a purely technical problem, and (b) the personal choice of the best mix of the risky portfolio and the risk-free asset.

Security characteristic line
A plot of the excess return on a security over the risk-free rate as a function of the excess return on the market.

Portfolio separation theorem
An investor's choice of a risky investment portfolio is separate from his attitude towards risk.

Pension Benefit Guaranty Corporation (PBGC)
A federal agency that insures the vested benefits of pension plan participants (established in 1974 by the ERISA legislation).

Parameter
A representation that characterizes a part of a model (e.g. a growth rate), the value of which is determined outside of the model.

Parallel shift in the yield curve
A shift in the yield curve in which the change in the yield on all maturities is the same number of basis points. In other words, if the 3 month T-bill increases 100 basis points (one percent), then the 6 month, 1 year, 5 year, 10 year, 20 year, and 30 year rates increase by 100 basis points as well.

Parallel loan
A process whereby two companies in different countries borrow each other's currency for a specific period of time, and repay the other's currency at an agreed maturity for the purpose of reducing foreign exchange risk. Also referred to as back-to-back loans.

Non-parallel shift in the yield curve
A shift in the yield curve in which yields do not change by the same number of basis points for every maturity.

Characteristic line
The market model applied to a single security. The slope of the line is a security's beta.

Comparative credit analysis
A method of analysis in which a firm is compared to others that have a desired target debt rating in order to infer an appropriate financial ratio target.

Formica parachute
Unemployment compensation

Garage sale
Sale of unwanted items at extremely low prices.

Separate Trading of Registered Interest (STRIPS)
Separate Trading of Registered Interest and Principal Securities (STRIPS) are securities that have their periodic interest payments separated from the final maturity payment and the two cash flows are sold to different investors.

Guaranteed insurability
A life and health insurance policy feature that enables the insured to add coverage at future times and at fixed and agreed upon rates regardless of insurability.

Karat
A measure of the purity of gold. Twenty-four karat (24K) is considered as pure gold.