| risk premium | The excess return required from an investment in a risky asset over that required from a risk-free investment.
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| variance | The average squared difference between the actual return and the average return.
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| standard deviation | The positive square root of the variance.
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| normal distribution | A symmetric, bell-shaped frequency distribution that is completely defined by its mean and standard deviation.
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| geometric average return | The average compound return earned per year over a multiyear period.
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| arithmetic average return | The return earned in an average year over a multiyear period.
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| efficient capital market | A market in which security prices reflect available information.
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| efficient markets hypothesis (EMH) | The hypothesis that actual capital markets, such as the NYSE, are efficient.
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