Value additivity principal

Value additivity principal

Value additivity principal

Prevails when the value of a whole group of assets exactly equals the sum of the values of the individual assets that make up the group of assets. Stated differently, the principle that the net present value of a set of independent projects is just the sum of the net present values of the individual projects.



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Utility function

Utility function

Utility function

A mathematical expression that assigns a value to all possible choices. In portfolio theory the utility function expresses the preferences of economic entities with respect to perceived risk and expected return.



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Utility

Utility

Utility

The measure of the welfare or satisfaction of an investor or person.



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Upstairs market

Upstairs market

Upstairs market

A network of trading desks for the major brokerage firms and institutional investors that communicate with each other by means of electronic display systems and telephones to facilitate block trades and program trades.



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Unsystematic risk

Unsystematic risk

Unsystematic risk

Also called the diversifiable risk or residual risk. The risk that is unique to a company such as a strike, the outcome of unfavorable litigation, or a natural catastrophe that can be eliminated through diversification. Related: Systematic risk



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Unsecured debt

Unsecured debt

Unsecured debt

Debt that does not identify specific assets that can be taken over by the debtholder in case of default.



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