Chapter 9 & 10 Flashcards Preview

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Flashcards in Chapter 9 & 10 Deck (8):

A valuation model that users dividends and their growth properaly discounted back to the present

Dividend-growth valuation model


The price/ earnings ratio divided by the growth rate of earnings

PEG ratio


Income plus price appreciation during a specified time period divided by the cost of the investment

Holding period return (HPR)


The discount rate the equates the cost of an investment (cash outflows) with the cash in flows generated by the investment

Rate of return (internal rate of return or IRR)


The rate that equates the present value of cash inflows and cash outflows; the internal rate of return

Dollar-weighted rate of return


Geometric average of individual holding period returns

Time-weighted rate of return


The purchase of securities at different intervals to reduce the impact of price fluctuations

Dollar cost averaging


A system for the accumulation of shares in which the investor periodically buys the same number of shares

Share averaging