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2. Return on investment - Wikipedia

   en.wikipedia.org/wiki/Return_on_investment

   Return on investment. Return on investment (ROI) or return on costs (ROC) is the ratio between net income (over a period) and investment (costs resulting from an investment of some resources at a point in time). A high ROI means the investment's gains compare favourably to its cost. As a performance measure, ROI is used to evaluate the ...

3. Modern portfolio theory - Wikipedia

   en.wikipedia.org/wiki/Modern_portfolio_theory

   Modern portfolio theory (MPT), or mean-variance analysis, is a mathematical framework for assembling a portfolio of assets such that the expected return is maximized for a given level of risk. It is a formalization and extension of diversification in investing, the idea that owning different kinds of financial assets is less risky than owning ...

4. Cost of capital - Wikipedia

   en.wikipedia.org/wiki/Cost_of_capital

   Sustainable finance. v. t. e. In economics and accounting, the cost of capital is the cost of a company's funds (both debt and equity), or from an investor's point of view is "the required rate of return on a portfolio company's existing securities". [1] It is used to evaluate new projects of a company.

5. Alpha (finance) - Wikipedia

   en.wikipedia.org/wiki/Alpha_(finance)

   Alpha (finance) Alpha is a measure of the active return on an investment, the performance of that investment compared with a suitable market index. An alpha of 1% means the investment's return on investment over a selected period of time was 1% better than the market during that same period; a negative alpha means the investment underperformed ...

6. Risk–return spectrum - Wikipedia

   en.wikipedia.org/wiki/Risk–return_spectrum

   Risk–return spectrum. The risk–return spectrum (also called the risk–return tradeoff or risk–reward) is the relationship between the amount of return gained on an investment and the amount of risk undertaken in that investment. The more return sought, the more risk that must be undertaken.

7. Sharpe ratio - Wikipedia

   en.wikipedia.org/wiki/Sharpe_ratio

   Sharpe ratio. In finance, the Sharpe ratio (also known as the Sharpe index, the Sharpe measure, and the reward-to-variability ratio) measures the performance of an investment such as a security or portfolio compared to a risk-free asset, after adjusting for its risk. It is defined as the difference between the returns of the investment and the ...

8. Markowitz model - Wikipedia

   en.wikipedia.org/wiki/Markowitz_model

   It consists of essentially all shares and securities in the capital market (either long or short). The Market Portfolio would not include a specific security if the correlation between the portfolio and the security is zero with negative return (gambling), or if the correlation is one (whichever has lower return would not warrant investment).

9. Diversification (finance) - Wikipedia

   en.wikipedia.org/wiki/Diversification_(finance)

   Outline. Business and Economics portal. Money portal. v. t. e. In finance, diversification is the process of allocating capital in a way that reduces the exposure to any one particular asset or risk. A common path towards diversification is to reduce risk or volatility by investing in a variety of assets.