Policy asset allocation

Similar financial terms

Variable life insurance policy
A whole life insurance policy that provides a death benefit dependent on the insured's portfolio market value at the time of death. Typically the company invests premiums in common stocks, and hence variable life policies are referred to as equity-linked policies.

Traditional view (of dividend policy)
An argument that "within reason," investors prefer large dividends to smaller dividends because the dividend is sure but future capital gains are uncertain.

Tax differential view ( of dividend policy)
The view that shareholders prefer capital gains over dividends, and hence low payout ratios, because capital gains are effectively taxed at lower rates than dividends.

Signaling view (on dividend policy)
The argument that dividend changes are important signals to investors about changes in management's expectation about future earnings.

Perfect market view (of dividend policy)
Analysis of a decision on dividend policy, in a perfect capital market environment, that shows the irrelevance of dividend policy in a perfect capital market.

Monetary policy
Actions taken by the Board of Governors of the Federal Reserve System to influence the money supply or interest rates.

Collection policy
Procedures followed by a firm in attempting to collect accounts receivables.

Assets
Anything that the firm owns. In the balance sheet, assets are divided into intangible assets and tangible assets.

Current Assets
The value of assets held at the Balance Sheet date that are represented by cash, or can be expected to be converted into cash within the next 12 months.

Deferred assets
Payments that will be assigned as expenses in a later period, but that are paid in advance and temporarily set up as assets on the balance sheet.

Fixed assets
Alternative name for noncurrent assets.

Acquisition of assets
A merger or consolidation in which an acquirer purchases the selling firm's assets.

Wasting asset
An asset which has a limited life and thus, decreases in value (depreciates) over time. Also applied to consumed assets, such as gas, and termed "depletion."

Total asset turnover
The ratio of net sales to total assets.

Thus, the total asset turnover ratio compares the turnover with the assets that the business has used to generate that turnover.

In other words, we are just saying that for every 1 of assets, the turnover is x.

Tangible asset
An asset whose value depends on particular physical properties. These i nclude reproducible assets such as buildings or machinery and non-reproducible assets such as land, a mine, or a work of art. Also referred to as real assets.

Tactical Asset Allocation
Tactical Asset Allocation (TAA) is an asset allocation strategy that allows active departures from the normal asset mix based upon rigorous objective measures of value. Often called active management. It involves forecasting asset returns, volatilities and correlations. The forecasted variables may be functions of fundamental variables, economic variables or even technical variables.

Risk-free asset
An asset whose future return is known today with certainty.

Risky asset
An asset whose future return is uncertain.

Return on total assets
The ratio of earnings available to common stockholders to total assets.

Return on assets (ROA)
Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets).

Residual assets
Assets that remain after sufficient assets are dedicated to meet all senior debtholder's claims in full.

Reproducible assets
A tangible asset with physical properties that can be reproduced, such as a building or machinery.

Real assets
Identifiable assets, such as buildings, equipment, patents, and trademarks, as distinguished from a financial obligation.

Quick assets
Current assets minus inventories.

Publicly traded assets
Assets that can be traded in a public market, such as the stock market.

Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due within 1 year.

Non-reproducible assets
A tangible asset with unique physical properties, like a parcel of land, a mine, or a work of art.

Net assets
The difference between total assets on the one hand and current liabilities and noncapitalized longterm liabilities on the other hand.

Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share usually represents the fund's market price, subject to a possible sales or redemption charge. For a closed end fund, the market price may vary significantly from the net asset value.

Long-term assets
Value of property, equipment and other capital assets minus the depreciation. This is an entry in the bookkeeping records of a company, usually on a "cost" basis and thus does not necessarily reflect the market value of the assets.

Liquid asset
Asset that is easily and cheaply turned into cash - notably cash itself and short-term securities.

Limitation on asset dispositions
A bond covenant that restricts in some way a firm's ability to sell major assets.

Asset Protection Trust (APT)
A special form of irrevocable trust, usually created (settled) offshore for the principal purposes of preserving and protecting part of one's wealth offshore against creditors. Title to the asset is transferred to a person named the trustee. Generally used for asset protection and usually tax neutral. Its ultimate function is to provide for the beneficiaries of the APT.

Admitted Assets
Assets admitted by state law to be included in an insurance company's annual statement. These assets are an important item when regulators measure insurance company solvency. They may include mortgages, stocks, bonds and real estate.

Capital allocation decision
Allocation of invested funds between risk-free assets versus the risky portfolio.