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CALENDAR REBALANCING  look up translate image
Rebalancing a portfolio to target weights on a periodic basis; for example, monthly, quarterly, semiannually, or annually.
CALENDAR SPREAD  look up translate image
A strategy in which an investor sells (or buys) a near-dated call and buys (or sells) a longer-dated one on the same underlying asset and with the same strike.
CALENDAR-AND-PERCENTAGE-OF-PORTFOLIO REBALANCING  look up translate image
Monitoring a portfolio at regular frequencies, such as quarterly. Rebalancing decisions are then made based upon percentage-of-portfolio principles.
CALL  look up translate image
An option that gives the holder the right to buy an underlying asset from another party at a fixed price over a specific period of time.
CALL MARKET  look up translate image
A market in which trades occur only at a particular time and place (i.e., when the market is called).
CALL MONEY RATE  look up translate image
The interest rate that buyers pay for their margin loan.
CALL OPTION  look up translate image
An option that gives the holder the right to buy an underlying asset from another party at a fixed price over a specific period of time.
CALL PROTECTION  look up translate image
The time during which the issuer of the bond is not allowed to exercise the call option.
CALLABLE BOND  look up translate image
Bond that includes an embedded call option that gives the issuer the right to redeem the bond issue prior to maturity, typically when interest rates have fallen or when the issuer’s credit quality has improved.
CALLABLE BOND  look up translate image
A bond containing an embedded call option that gives the issuer the right to buy the bond back from the investor at specified prices on pre-determined dates.
CALLABLE COMMON SHARES  look up translate image
Shares that give the issuing company the option (or right), but not the obligation, to buy back the shares from investors at a call price that is specified when the shares are originally issued.
CALMAR RATIO  look up translate image
The compound annualized rate of return over a specified time period divided by the absolute value of maximum drawdown over the same time period.
CANCELED SHARES  look up translate image
Shares that were issued, subsequently repurchased by the company, and then retired (cannot be reissued).
CANDLESTICK CHART  look up translate image
A price chart with four bits of data for each time interval. A candle indicates the opening and closing price for the interval. The body of the candle is shaded if the opening price was higher than the closing price, and the body is clear if the opening price was lower than the closing price. Vertical lines known as wicks or shadows extend from the top and bottom of the candle to indicate the high and the low prices for the interval.
CANNIBALIZATION  look up translate image
Cannibalization occurs when an investment takes customers and sales away from another part of the company.
CANNIBALIZATION  look up translate image
Cannibalization occurs when an investment takes customers and sales away from another part of the company.
CAP  look up translate image
A combination of interest rate call options designed to hedge a borrower against rate increases on a floating-rate loan.
CAP RATE  look up translate image
See capitalization rate.
CAP WEIGHTING  look up translate image
See capitalization weighting.
CAPACITY  look up translate image
The ability of the borrower to make its debt payments on time.
CAPITAL ACCOUNT  look up translate image
A component of the balance of payments account that measures transfers of capital.
CAPITAL ADEQUACY RATIO  look up translate image
A measure of the adequacy of capital in relation to assets.
CAPITAL ALLOCATION LINE  look up translate image
(CAL) A graph line that describes the combinations of expected return and standard deviation of return available to an investor from combining the optimal portfolio of risky assets with the risk-free asset.
CAPITAL ASSET PRICING MODEL  look up translate image
(CAPM) An equation describing the expected return on any asset (or portfolio) as a linear function of its beta relative to the market portfolio.
CAPITAL BUDGETING  look up translate image
The allocation of funds to relatively long-range projects or investments.
CAPITAL CHARGE  look up translate image
The company’s total cost of capital in money terms.
CAPITAL CONSUMPTION ALLOWANCE  look up translate image
A measure of the wear and tear (depreciation) of the capital stock that occurs in the production of goods and services.
CAPITAL DEEPENING  look up translate image
An increase in the capital-to-labor ratio.
CAPITAL DEEPENING INVESTMENT  look up translate image
Increases the stock of capital relative to labor.
CAPITAL EXPENDITURE  look up translate image
Expenditure on physical capital (fixed assets).
CAPITAL FLOWS FORECASTING APPROACH  look up translate image
An exchange rate forecasting approach that focuses on expected capital flows, particularly long-term flows such as equity investment and foreign direct investment.
CAPITAL LEASE  look up translate image
See finance lease.
CAPITAL MARKET EXPECTATIONS  look up translate image
(CME) Expectations concerning the risk and return prospects of asset classes.
CAPITAL MARKET EXPECTATIONS  look up translate image
An investor’s expectations concerning the risk and return prospects of asset classes.
CAPITAL MARKET LINE  look up translate image
(CML) The line with an intercept point equal to the risk-free rate that is tangent to the efficient frontier of risky assets; represents the efficient frontier when a risk-free asset is available for investment.
CAPITAL MARKET SECURITIES  look up translate image
Securities with maturities at issuance longer than one year.
CAPITAL MARKETS  look up translate image
Financial markets that trade securities of longer duration, such as bonds and equities.
CAPITAL RATIONING  look up translate image
A capital rationing environment assumes that the company has a fixed amount of funds to invest.
CAPITAL RATIONING  look up translate image
A capital rationing environment assumes that the company has a fixed amount of funds to invest.
CAPITAL RESTRICTIONS  look up translate image
Controls placed on foreigners’ ability to own domestic assets and/or domestic residents’ ability to own foreign assets.
CAPITAL STOCK  look up translate image
The accumulated amount of buildings, machinery, and equipment used to produce goods and services.
CAPITAL STRUCTURE  look up translate image
The mix of debt and equity that a company uses to finance its business; a company’s specific mixture of long-term financing.
CAPITAL STRUCTURE  look up translate image
The mix of debt and equity that a company uses to finance its business; a company’s specific mixture of long-term financing.
CAPITAL-INDEXED BONDS  look up translate image
Type of index-linked bond. The coupon rate is fixed but is applied to a principal amount that increases in line with increases in the index during the bond’s life.
CAPITALIZATION OF EARNINGS METHOD  look up translate image
In the context of private company valuation, valuation model based on an assumption of a constant growth rate of free cash flow to the firm or a constant growth rate of free cash flow to equity.
CAPITALIZATION RATE  look up translate image
The divisor in the expression for the value of perpetuity. In the context of real estate, the divisor in the direct capitalization method of estimating value. The cap rate equals net operating income divided by value.
CAPITALIZATION WEIGHTING  look up translate image
The most common security weighting scheme in which constituents are held in proportion to their market capitalizations, calculated as price times available shares. Also known as market value, market cap, or cap weighting. Synonyms: Market value
CAPITALIZED CASH FLOW METHOD  look up translate image
In the context of private company valuation, valuation model based on an assumption of a constant growth rate of free cash flow to the firm or a constant growth rate of free cash flow to equity. Also called capitalized cash flow model. Synonyms: Capitalized cash flow model
CAPITALIZED CASH FLOW MODEL  look up translate image
In the context of private company valuation, valuation model based on an assumption of a constant growth rate of free cash flow to the firm or a constant growth rate of free cash flow to equity. Also called capitalized cash flow method. Synonyms: Capitalized cash flow method
CAPITALIZED INCOME METHOD  look up translate image
In the context of private company valuation, valuation model based on an assumption of a constant growth rate of free cash flow to the firm or a constant growth rate of free cash flow to equity.
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CFA Program Glossary
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Created by admin
Created on 2019-09-12 19:00:52
Number of terms 995
Last added Expected holding-period return by admin
2019-09-12 19:06:15
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    CFA Glossary