biz buds et al-Hey guys and gals, seeing a lot of questions for definitions. As my friend Eric Husman says, there is this thing called google..... Anyways, I am a simple man so I will give you a simple mans definition of some of these. 1-Pari Passu- basically means everyone is treated the same. If common shares are listed, they have certain voting rights. If new shares in the same company are listed, they have the same voting rights as the other common shares. They are pari passu when it comes to voting rights. Can be equated to other things in finance as well. 2-Gnomes of Zurich- havent heard that one in a long time. Basically refers to Swiss Bankers. 3-Alpha and Beta-.... Beta has to deal with volatility and correlation with a benchmark. For instance, what is the Beta of a stock in relation to the Dow? 0 means no correlation. 1 means it is positively correlated and moves in the direction of the Dow. -1 means it is negatively correlated and moves in the opposite direction of the Dow. Alpha just basically tells you if you are earning the expected return for risk involved. Alpha of 0 means you are getting the expected return. Alpha 1 means getting more than expected return for risk and -1 means earning less than expected return for risk. You can have betas of 2,3, -2,-3,etc. You can have alphas of 2,3,-2,-3, etc.
Posted on: Mon, 22 Dec 2014 05:48:10 +0000
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