D.30 Quantitative investment concepts and measures of investment returns Flashcards

The concept that money available today is worth more than the same amount in the future due to its potential earning capacity.

The difference between the present value of cash inflows and outflows, used to assess the profitability of an investment.

The discount rate at which the net present value of an investment’s cash flows equals zero, representing the investment’s expected rate of return.

The rate at which an investment grows annually over a specified period, assuming reinvestment of returns.

A measure of the dispersion of investment returns, indicating the level of volatility and risk associated with an investment.

A risk-adjusted performance measure that calculates excess return per unit of risk, using standard deviation as the risk metric.

A measure of an investment’s excess return compared to its expected return based on market movements, often indicating manager skill.

A measure of an investment’s sensitivity to market movements, where greater than 1 indicates higher volatility than the market.

A return measure that accounts for cash flows in and out of an investment, reflecting an investor’s actual experience.

A performance measure that eliminates the impact of investor cash flows, used to evaluate fund manager performance.