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Click over any alphabet to get a partial list of terms or click over 'Full List' to get complete list of terms on one page. A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z Full List |
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Inefficient market When a market is described as inefficient, it means that investors do not know enough about the securities in that market to make informed decisions about what to buy or the price to pay. There can be inefficient markets for shares in new companies, particularly those in new industries. An inefficient market is the opposite of an efficient one, where it's assumed that investors know everything there is to know about the securities they are buying. Inflation Inflation is a persistent increase in prices. Hyperinflation, when prices rise by 100% or more annually, can destroy economic, and sometimes political, stability by driving the price of necessities higher than people can afford. Inflation-adjusted return Inflation-adjusted return is what you earn on an investment after accounting for the impact of inflation. For example, if you earn 7% on a bond during a period when the inflation rate averages 3%, your inflation-adjusted return is 4%. Inflation-adjusted return is also known as real return. Since inflation diminishes the buying power of your money, it's important that the rate of return on your overall investment portfolio be greater than the rate of inflation. That way, your money grows rather than shrinks in value over time. Initial Public Offering (IPO) The first offering to the public of common stock, e.g. of a former privately-held company or a portion of the common stock of the hitherto wholly-owned subsidiary. Internal Rate of Return (IRR) The rate at which future cash flows must be discounted in order to equal the cost of the investment. International Monetary Fund (IMF) The IMF was set up as a result of the United Nations Bretton Woods Agreement of 1944 to help stabilize world currencies, lower trade barriers, and help developing nations pay their debts. The IMF's activities are funded by developed nations and are sometimes the subject of intense criticism, either by the nations the IMF is designed to help, the nations footing the bill, or both. In-the-Money A call option is said to be in the money when it has a strike price below the current price of the underlying commodity or security on which the option has been written. Likewise when a put option has a strike price above the current price it is said to be in the money. Intrinsic value A company’s intrinsic value, or underlying value, is used to calculate its projected worth. You determine intrinsic value by subtracting a company’s long-term debt from its anticipated future assets, including profits, the potential for increased efficiency, and the sale of new company share. Some experts also calculate intrinsic value by dividing the company’s estimated future earnings by the number of its existing shares. This method weighs the current price of a share against its future worth. Critics of using intrinsic worth as a way to evaluate potential investments point out that all of the numbers except debt are hypothetical. Investment objective An investment objective is a financial goal that helps determine the type of investments you make. For example, if you want to provide a source of regular income, you might select a portfolio of high-rated bonds and dividend-paying shares. ISIN (International Securities Identification Number) is a unique identification number for a security. |