Investments Dictionary
Main Content
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- Hedge Fund
- A private investment pool, open to institutional
or wealthy investors, that is largely exempt from SEC
regulation and can pursue more speculative policies than
mutual funds.
- Hedge ratio (for an option)
- The number of stocks required
to hedge against the price risk of holding one option. Also
called the option's delta.
- Hedging
- Investing in an asset to reduce the overall risk of
a portfolio.
- Hedging Demands
- Demands for securities to hedge
particular sources of consumption risk, beyond the usual
mean variance diversification motivation.
- High Water Mark
- The previous value of a portfolio that must
be re‐attained before a hedge fund can charge incentive fees.
- Holding-period Return
- The rate of return over a given
period.
- Homogenous Expectations
- The assumption that all investors
use the same expected returns and covariance matrix of
security returns as inputs in security analysis.
- Horizon Analysis
- Forecasting the realized compound yield
over various holding periods or investment horizons.
Relative Content