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The Marshall-Edgeworth index, credited to Marshall (1887) and Edgeworth (1925), [11] is a weighted relative of current period to base period sets of prices. This index uses the arithmetic average of the current and based period quantities for weighting. It is considered a pseudo-superlative formula and is symmetric. [12]
The modified Dietz method [1] [2] [3] is a measure of the ex post (i.e. historical) performance of an investment portfolio in the presence of external flows. (External flows are movements of value such as transfers of cash, securities or other instruments in or out of the portfolio, with no equal simultaneous movement of value in the opposite direction, and which are not income from the ...
These equations show that the stock return is influenced by the market (beta), has a firm specific expected value (alpha) and firm-specific unexpected component (residual). Each stock's performance is in relation to the performance of a market index (such as the All Ordinaries). Security analysts often use the SIM for such functions as ...
2003: original index value was $2.80; $2.80/$2.50 = 112%, so new index value is 112; When an index has been normalized in this manner, the meaning of the number 112, for instance, is that the total cost for the basket of goods is 4% more in 2001 than in the base year (in this case, year 2000), 8% more in 2002, and 12% more in 2003.
For L = -1/E d and E d = -1/L, the elasticity of demand for industry A will be -2.5. We can use the value of the Lerner index to calculate the marginal cost (MC) of a firm as follows: 0.4 = (10 – MC) ÷ 10 ⇒ MC = 10 − 4 = 6. The missing values for industry B are found as follows: from the E d value of -2, we find that the Lerner index is ...
A valuation multiple [1] is simply an expression of market value of an asset relative to a key statistic that is assumed to relate to that value. To be useful, that statistic – whether earnings, cash flow or some other measure – must bear a logical relationship to the market value observed; to be seen, in fact, as the driver of that market value.
The average magnitude of the observations is merely an approximation of the standard deviation of the market index. Assuming that the market index daily changes are normally distributed with mean zero and standard deviation σ, the expected value of the magnitude of the observations is √(2/ π)σ = 0.798σ. The net effect is that this crude ...
The index number problem is the term used by economists to describe the limitation of statistical indexing, when used as a measurement for cost-of-living increases. [7] For example, in the Consumer Price Index, a reference year's "market basket" is assigned an index number of 100.