G-1 Flashcards
A priori probability
A probability based on logical analysis rather than on observation or personal judgment
Abnormal return
The amount by which a security’s actual return differs from its expected return, given the security’s risk and the market’s return
Absolute dispersion
The amount of variability present without comparison to any reference point or benchmark
Absolute frequency
The number of observations in a given interval (for grouped data)
Accelerated book build
An offering of securities by an investment bank acting as principal that is accomplished in only one or two days
Accelerated methods
Depreciation methods that allocate a relatively large proportion of the cost of an asset to the early years of the asset’s useful life
Accounting costs
Monetary value of economic resources used in performing an activity. These can explicit, out-of-pocket, current payments, or an allocation of historical payments (depreciation) for resources. They do not include opportunity costs.
Accounting profit
Income as reported on the income statement, in accordance with prevailing accounting standards, before the provisions for income tax expense. Also called income. before taxes or pretax income
Accounts payable
Amounts that a business owes to its vendors for goods and services that were purchased from them but which have not yet been paid
Accounts receivable turnover
Ratio of sales on credit to the average balance in accounts receivable
Accrued expenses
Liabilities related to expenses that have been incurred but not yet paid as of the end of an accounting periods
Acid-test ratio
A stringent measure of liability that indicates a company’s ability to satisfy current liabilities with its most liquid assets;
Formula: [cash + short-term marketable investments + receivables] / current liabilities
Acquisition method
A method of accounting for a business combination where the acquirer is required to measure each identifiable asset and liability at fair value. This method was the result of a joint project of the IASB and FASB aiming at convergence in standards for the accounting business combinations
Action lag
Delay from policy decisions to implementation
Active investment
An approach to investing in which the investor seeks to outperform a given benchmark
