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Size Premium
The size premium is the historical tendency for the stocks of firms with smaller market capitalizations to outperform the stocks of firms with larger market capitalizations. It is one of the factors in the Fama–French three-factor model. See also * Liquidity premium *Risk premium
A risk premium is a measure of excess return that is required by an individual to compensate being sub ...
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Market Capitalization
Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by the number of common shares outstanding. Description Market capitalization is sometimes used to rank the size of companies. It measures only the equity component of a company's capital structure, and does not reflect management's decision as to how much debt (or leverage) is used to finance the firm. A more comprehensive measure of a firm's size is enterprise value (EV), which gives effect to outstanding debt, preferred stock, and other factors. For insurance firms, a value called the embedded value (EV) has been used. It is also used in ranking the relative size of stock exchanges, being a measure of the sum of the market capitalizations of all companies listed on each stock exchange. The total capitalization of stock markets or eco ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Fama–French Three-factor Model
In asset pricing and portfolio management, the Fama–French three-factor model is a statistical model designed in 1992 by Eugene Fama and Kenneth French to describe stock returns. Fama and French were colleagues at the University of Chicago Booth School of Business, where Fama still works. In 2013, Fama shared the Nobel Memorial Prize in Economic Sciences for his empirical analysis of asset prices. The three factors are: # Market excess return, # Outperformance of small versus big companies, and # Outperformance of high book/market versus low book/market companies There is academic debate about the last two factors. Background and development Factor models are statistical models that attempt to explain complex phenomena using a small number of underlying causes or factors. The traditional asset pricing model, known formally as the capital asset pricing model (CAPM) uses only one variable to compare the returns of a portfolio or stock with the returns of the market as a whol ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Liquidity Premium
In economics, a liquidity premium is the explanation for a difference between two types of financial securities (e.g. stocks), that have all the same qualities except liquidity. It is a segment of a three-part theory that works to explain the behavior of yield curves for interest rates. The upwards-curving component of the interest yield can be explained by the liquidity premium. The reason behind this is that short term securities are less risky compared to long term rates due to the difference in maturity dates. Therefore investors expect a premium, or risk premium for investing in the risky security. Liquidity risk premiums are recommended to be used with longer-term investments, where those particular investments are illiquid. Assets that are traded on an organized market are more liquid. Financial disclosure requirements are more stringent for listed companies. For a given economic result, organized liquidity and transparency make the value of quoted share higher than the ma ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Risk Premium
A risk premium is a measure of excess return that is required by an individual to compensate being subjected to an increased level of risk. It is used widely in finance and economics, the general definition being the expected risky Rate of return, return less the Risk-free interest rate, risk-free return, as demonstrated by the formula below. Risk \ premium = E(r) - r_f Where E(r) is the risky expected rate of return and r_f is the risk-free return. The inputs for each of these variables and the ultimate interpretation of the risk premium value differs depending on the application as explained in the following sections. Regardless of the application, the market premium can be volatile as both comprising variables can be impacted independent of each other by both cyclical and abrupt changes. This means that the market premium is dynamic in nature and ever-changing. Additionally, a general observation regardless of application is that the risk premium is larger during economic do ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Style Investing
Style investing is an investment approach in which securities are grouped into categories, and portfolio allocation is based on selection among "styles" rather than among individual securities. Style investors, then, make portfolio allocation decisions by placing their money in broad categorizations of assets, such as small-cap, value, low-volatility, or emerging markets. Some investors dynamically allocate across different styles and move funds back and forth between these styles depending on their expected performance. Styles enable institutional investors to organize and simplify their portfolio allocation decisions, as well as to measure and evaluate the performance of professional managers relative to standardized style benchmarks (see style drift). An implication of style investing is that it could impact financial markets, causing stocks to move together. Asset pricing Style investing can be used in the study of asset prices and can serve as a useful framework for i ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Duff & Phelps
Duff may refer to: People * Duff (surname) * Duff (given name) * Duff (nickname) * Karen Duffy, an actress, model, and former MTV VJ once known as "Duff" * Duff Roman, on-air name of Canadian radio personality and executive David Mostoway (born 1938) Places * Duff, Indiana, United States, an unincorporated community * Duff, Nebraska, United States, an unincorporated community * Duff, Tennessee, United States, an unincorporated community * Duff, Saskatchewan, Canada, a village * Duff Hill, a mountain in County Wicklow, Ireland * Duff River, a river in County Sligo, Ireland * Duff Islands, in the Solomon Islands, Pacific Ocean * Mount Duff, Mangareva Island, French Polynesia * Mount Duff (Yakutat), a Canadian mountain on the border between Alberta and British Columbia * Duff Peak, Victoria Land, Antarctica * Duff Point, Greenwich Island, Antarctica Arts and entertainment * ''The DUFF'' (novel), by Kody Keplinger ** '' The DUFF'', a 2015 film based on the Keplinge ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
