Announcement date Date on which particular news concerning a given company is announced to the public. Used in event studies, which researchers use to evaluate the economic impact of events of interest.
Annual fund operating expenses For investment companies, the management fee and "other expenses," including the expenses for maintaining shareholder records, providing shareholders with financial statements, and providing custodial and accounting services. For 12b-1 funds, selling and marketing costs are included.
Annual percentage rate (APR) The periodic rate times the number of periods in a year. For example, a 5% quarterly return has an APR of 20%.
Annual percentage yield (APY) The effective, or true, annual rate of return. The APY is the rate actually earned or paid in one year, taking into account the affect of compounding. The APY is calculated by taking one plus the periodic rate and raising it to the number of periods in a year. For example, a 1% per month rate has an APY of 12.68% (1.01^12).
Annual report Yearly record of a publicly held company's financial condition. It includes a description of the firm's operations, its balance sheet and income statement. SEC rules require that it be distributed to all shareholders. A more detailed version is called a 10-K.
Annualized gain If stock X appreciates 1.5% in one month, the annualized gain for that sock over a twelve month period is 12*1.5% = 18%. Compounded over the twelve month period, the gain is (1.015)^12 = 19.6%.
Annualized holding period return The annual rate of return that when compounded t times, would have given the same t-period holding return as actually occurred from period 1 to period t.
Annuity A regular periodic payment made by an insurance company to a policyholder for a specified period of time.
Annuity due An annuity with n payments, wherein the first payment is made at time t = 0 and the last payment is made at time t = n - 1.
Annuity factor Present value of $1 paid for each of t periods.
Arbitrage The simultaneous buying and selling of a security at two different prices in two different markets, resulting in profits without risk. Perfectly efficient markets present no arbitrage opportunities. Perfectly efficient markets seldom exist.
Arbitrage Pricing Theory (APT) An alternative model to the capital asset pricing model developed by Stephen Ross and based purely on arbitrage arguments.
Arbitrage-free option-pricing models Yield curve option-pricing models.
Arbitrageurs People who search for and exploit arbitrage opportunities.
Asian option Option based on the average price of the asset during the life of the option.
Ask This is the quoted ask, or the lowest price an investor will accept to sell a stock. Practically speaking, this is the quoted offer at which an investor can buy shares of stock; also called the offer price.
Ask price A dealer's price to sell a security; also called the offer price.