Guide to Analysing Companies
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FINANCE Essencial finance
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AIM 23 01 Essential Finance 10/11/06 2:21 PM Page 23 Allfinanz An Anglo-German neologism for the coming together of banking and insurance services under one institutional umbrella. Many such institutions have been formed by merger or by a joint venture between a bank and an insurance company. Some (like Deutsche Bank) started what they lacked from scratch (in this case forming an insurance company). The term has since been embraced by many companies from Ireland to New Zealand, offering everything from life assurance to tax planning. Allotment The amount of stock allocated to each participant of a syndi- cate formed by an investment bank to underwrite and dis- tribute a new issue of shares. It can also be the amount of stock allocated to each subscriber when such an issue is over- subscribed. Alpha A mathematical estimate of the return to be expected from a particular stock based on such things as the rate of growth of the company’s earnings per share. To measure the performance of a particular stock, it is assumed that the return from the market as a whole is zero. So, for example, a stock with an alpha of 1.25 would be expected to rise by 25% during a year in which the market remained flat. A share whose price is low compared with its alpha may therefore be considered good value. Alpha can also be applied to a portfolio of invest- ments, to measure how well or badly it has done compared with how much risk it holds. A stock with a high alpha may or may not also have a high beta, a measure of its volatility. A 24 ALLFINANZ 01 Essential Finance 10/11/06 2:21 PM Page 24 Alpha stocks The most actively traded shares on the London stockmar- ket. All such stocks are traded under the stock exchange automated quotations (seaq) system, and are guaran- teed continuous two-way trading by market makers. The number of alpha stocks may change from time to time as fash- ions and markets dictate. Not to be confused with alpha or beta. Download 1.1 Mb. Do'stlaringiz bilan baham: |
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