Fortune 500
What is the Fortune 500? The Fortune 500 is an annual list of the top 500 United States companies by total revenues – public and private included. The list is compiled and published by Fortune Magazine, which is based in New York, USA. History of Fortune Magazine Founded in 1929 by Henry Robinson Luce, Fortune...
Term to Maturity
What is Term to Maturity? Term to maturity is the remaining life of a bond or other type of debt instrument. The duration ranges between the time when the bond is issued until its maturity date when the issuer is required to redeem the bond and pay the face value of the bond to the...
Strategic Asset Allocation (SAA)
What is Strategic Asset Allocation (SAA)? Strategic asset allocation refers to a long-term portfolio strategy that involves choosing asset class allocations and rebalancing the allocations periodically. Rebalancing occurs when the asset allocation weights materially deviate from the strategic asset allocation weights due to unrealized gains/losses in each asset class. An SAA strategy is used to...
Roy’s Safety-first Criterion
What is Roy’s Safety-first Criterion? Roy’s safety-first criterion is a risk management technique used by investors to compare and choose a portfolio based on the criterion that the probability of a portfolio’s return dropping below a threshold level return is reduced. In Roy’s safety-first criterion, the optimal portfolio is one that minimizes the probability of...
Zero-Coupon Bond
What is a Zero-Coupon Bond? A zero-coupon bond is a bond that pays no interest and trades at a discount to its face value. It is also called a pure discount bond or deep discount bond. U.S. Treasury bills are an example of a zero-coupon bond. Understanding Zero-Coupon Bonds As a zero-coupon bond does not...
