Investment Project Analysis Methods: Value Creation, Payback Periods, and Return Calculations

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Finance - Personal Finance

charlotte1oxhi Created by 10 mon ago

Cards in this deck(30)

What is the term for the difference between the market value of a project and its cost, indicating how much value is created from undertaking an investment?

What is the term for the time it takes to recover the initial cost of an investment in a nominal sense, often used as a simple measure of investment risk?

What is the term for the time it takes to recover the initial cost of an investment on a discounted basis, considering the time value of money?

What is the term for the ratio of average net income to average book value, used as a simple measure of investment performance?

What is the term for the return rate that makes the net present value of all cash flows from a particular project equal to zero?

What is the term for projects where the acceptance of one project means the rejection of another?

What is the term for the measure of the benefit per unit cost of an investment, considering the time value of money?

What is the term for the difference between the price received from selling an asset and the price paid for it?

What is the term for the return on an investment measured in dollars, including dividends and capital gains?

What is the term for the return of an investment measured as a percentage of the original investment, including dividend yield and capital gains yield?

What is the term for the ratio of income to the beginning price of an investment, often used to measure the income component of a stock's return?

What is the term for the ratio of the change in price of an asset to its beginning price, often used to measure the capital gains component of a stock's return?

What is the term for the rate of return on a riskless investment, often represented by the return on Treasury bills?

What is the term for the excess return on a risky asset over the risk-free rate, representing the reward for bearing risk?

What is the term for the measure of the dispersion of returns, calculated as the sum of squared deviations from the mean divided by the number of observations minus one?

What is the term for the square root of the variance, often used to measure the volatility of returns?

What is the term for the return earned in an average period over multiple periods, calculated by adding up all returns and dividing by the number of returns?

What is the term for the average compound return per period over multiple periods?

What is the term for the return based on the probabilities of possible outcomes, calculated as the sum of the probability of each outcome multiplied by its expected return?

What is the term for the weighted average of deviations, often used in the context of measuring volatility?

What chapter discusses the measures of volatility of returns, specifically variance and standard deviation?

What is the term for a collection of assets, where the weight of each asset is the percentage of the portfolio invested in that asset?

What is the term for the sum of expected return and unexpected return?

What is the term for the sum of systematic risk and unsystematic risk?

What is the term for risk factors that affect a majority of assets, also known as non-diversifiable or market risk?

What is the term for risk factors that affect a limited number of assets, also known as unique or asset-specific risk?

What is the term for the investment strategy of holding a variety of assets to reduce unsystematic risk?

What is the term for the measure of the relative level of risk of individual stocks versus the market's average risk?

What is the term for the calculation of a portfolio's beta by multiplying the weight of each asset by its individual beta and summing the results?

What is the term for the difference between the expected return of a stock and the risk-free rate, indicating the additional return expected for taking on risk?

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