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- Data Mining
- Sorting through large amounts of historical
data to uncover systematic patterns that can be exploited.
- Day Order
- A buy order or a sell order expiring at the close
of the trading day.
- Days' Receivables
- See average collection period.
- Dealer Market
- A market where traders specializing in
particular commodities buy and sell assets for their own
accounts. The OTC market is an example.
- Debenture or Unsecured Bond
- A bond not backed by
- Debt Securities
- Bonds; also called fixed‐income securities.
- Dedication Strategy
- Refers to multiperiod cash flow
- Default Premium
- A differential in promised yield that
compensates the investor for the risk inherent in purchasing
a corporate bond that entails some risk of default.
- Defensive Industries
- Industries with little sensitivity to the
state of the economy.
- Deferred Annuities
- Tax-advantaged life insurance product.
Deferred annuities offer deferral of taxes with the option of
withdrawing one's funds in the form of a life annuity.
- Defined Benefit Plans
- Pension plans in which retirement
benefits are set according to a fixed formula.
- Defined Contribution Plans
- Pension plans in which the
employer is committed to making contributions according to
a fixed formula.
- Degree of Operating Leverage
- Percentage change in profits
for a 1% change in sales.
- Delta (of option)
- See hedge ratio.
- Delta Neutral
- The value of the portfolio is not affected by
changes in the value of the asset on which the options are
- Demand Shock
- An event that affects the, demand for goods
and services in the economy.
- Derivative Asset/Contingent Claim
- Securities providing
payoffs that depend on or are contingent on the values of
other assets such as commodity prices, bond and stock prices,
or market index values. Examples are futures and options.
- Derivative Security
- See primitive security.
- Direct Search Market
- Buyers and sellers seek each other
directly and transact directly.
- Directional Strategy
- Speculation that one sector or another
will outperform other sectors of the market.
- Discount Bonds
- Bonds selling below par value.
- Discretionary Account
- An account of a customer who gives
a broker the authority to make buy and sell decisions on the
- Diversifiable Risk
- Risk attributable to firm‐specific risk, or
nonmarket risk. Nondiversifiable risk refers to systematic or
- Spreading a portfolio over many investments
to avoid excessive exposure to any one source of risk.
- Dividend Discount Model (DDM)
- A formula stating that the
intrinsic value of a firm is the present value of all expected
- Dividend Payout Ratio
- Percentage of earning~ paid out as
- Dividend Yield
- The percent rate of return provided by a
stock's dividend payments.
- Dollar-weighted Rate of Return
- The internal rate of return on
- Doubling Option
- A sinking fund provision that may allow
repurchase of twice the required number of bonds at the
sinking fund call price.
- Dow Theory
- A technical analysis technique that seeks to
discern long‐ and short‐term trends in security prices.
- DuPont System
- Decomposition of firm profitability
measures into the underlying factors that determine such
- A measure of the average life of a bond, defined as the weighted average of the times until each payment is made,
with weights proportional to the present value of the payment.
- Dynamic Hedging
- Constant updating of hedge positions as
market conditions change.