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Investments Dictionary

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Tax Anticipation Notes
Short-term municipal debt to raise funds to pay for expenses before actual co1lection of taxes.
Tax Deferral Option
The feature of the U.S. Internal Revenue Code that the capital gains tax on an asset is payable only when the gain is realized by selling the asset.
Tax Swap
Swapping two similar bonds to receive a tax benefit.
Tax-deferred Retirement Plans
Employer‐sponsored and other plans that allow contributions and earnings to be made and accumulate tax‐free until they are paid out as benefits.
Technical Analysis
Research to identify mispriced securities that focuses on recurrent and predictable stock price patterns and on proxies for buy or sell pressure in the market.
Tender Offer
An offer from an outside investor to shareholders of a company to purchase their shares at a stipulated price, usually substantially above the market price, so that the investor may amass enough shares to obtain control of the company.
Term Insurance
Provides a death benefit only, no build‐up of cash value.
Term Premiums
Excess of the yields to maturity on long‐term bonds over those of short‐term bonds.
Term Structure of Interest Rates
The pattern of interest rates appropriate for discounting cash flows of various maturities.
Time Value (of an option)
The part of the value of an option that is due to its positive time to expiration. Not to be confused with present value or the time value of money.
Times Interest Earned
Ratio of profits to interest expense.
Time-weighted Average
An average of the period‐by‐period holding‐period returns of an investment.
Tobin's q.
Ratio of market value of the firm to replacement cost.
Total Asset Turnover
The annual sales generated by each dollar of assets (sales/assets).
Tracking Error
The difference between the return on a specified portfolio and that of a benchmark portfolio designed to mimic that portfolio.
Tracking Portfolio
A portfolio constructed to have returns with the highest possible correlation with a systematic risk factor.
Treasury Bill
Short‐term, highly liquid government securities issued at a discount from the face value and returning the face amount at maturity.
Treasury Bond or Note
Debt obligations of the federal government that make semiannual coupon payments and are issued at or near par value.
Treynor's Measure
Ratio of excess return to beta.
Trin Statistic
Ratio of average trading volume in declining stocks to average volume in advancing stocks. Used in technical analysis.
The transition point between recession and recovery.
The ratio of the trading activity of a portfolio to the assets of the portfolio.

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