Eric Berch

Eric Berch

Annualized gain

If stock X appreciates 1.5% in one month, the annualizedgain for that stock over a twelve month period is (12 x 1.5%) = 18%. Compounded over the 12 month period, the gain is (1.015)^12 -1 = 19.6%.

Historical cost

Describes the accounting cost carried in the books for a current cost of the item.

Ian Berch

Bifurcation Diagram

A graph that shows the critical points where bifurcation occurs, and the possible solutions that exist at that point.

Operating ratio

A ratio that measures a firm's operating efficiency.

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Overlay strategy

A strategy of using futures for asset allocation by pension sponsors to avoid disrupting the activities of money managers.

Perfect market view (of capital structure)

Analysis of a firm'scapital structure decision, which shows the irrelevance of capital structure in a perfect capital market.
Mark Berch Mark Berch

Mark Berch

Mark Berch

Complete portfolio

The entire portfolio, including risky and risk-free assets.

Junior security

A security that has a lower-priority claim on a company'sassets and income than a senior security. For example common stock is junior to preferred stock.

Ian Berch

Selling Syndicate

A group of underwriters that issues a firm'ssecurities by buying them from the issuing firm and reselling them to a group of smaller brokerage firms for eventual sale to individual investors.

Underwriting agreement

The contract between a corporation issuing new publicly offered securities and the managing underwriter as agent for the underwriting group. Compare to agreement among underwriters.

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Written-down value

The book value of an asset after allowing for depreciation and amortization.

Exercise price

The price at which the security underlying an options contract may be bought or sold.
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Eric Berch

Bid price

This is the quotedbid, or the highest price an investor is willing to pay to buy a security. Practically speaking, this is the available price at which an investor can sell shares of stock. Related: Ask, offer.

Carve out

Usually occurs when a company decides to IPO one of their subsidiaries or divisions. The company usually only offers a minority share to the equity market. Also known as equity carve out.

Ian Berch

Ian Berch Eric Berch



Mark Berch Eric Berch