#### Activity Ratio

Accounting ratios that measure a firm's ability to convert different accounts within their balance sheet into cash or sales.

#### Beta

A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.

#### Business Model

A description of the operations of a business including the components of the business, the functions of the business, and the revenues and expenses that the business generates.

#### Competitive Forces

Threat of new entrants, bargaining power of suppliers, bargaining power of buyers, rivalry among existing firms and the threat from substitute products or services.

#### Corporate Governance

The set of processes, customs, policies, laws, and institutions affecting the way a corporation (or company) is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed.

#### Covered Call Options

An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset in an attempt to generate increased income from the asset.

#### Discounted Cash Flow Model (DCF)

A valuation method used to estimate the attractiveness of an investment opportunity. This is done by discounting future free cash flow projections (usually using the weighted average cost of capital) to find a present value. This value is used to evaluate the potential for investment (i.e. It is a good investment opportunity if the present value found through DCF is higher than the current cost of the investment).

#### Duration Positioning

Positioning using a measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. The bigger the duration number, the greater the interest-rate risk or reward for bond prices.

#### Enterprise-Value-to-Sales Ratio (EV/Sales)

A valuation measure that compares the enterprise value of a company to the company's sales. This measure gives investors an idea of how much it costs to buy the company's sales.

#### Leverage Ratios

Any ratio used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to measure its ability to meet financial obligations. There are several different ratios, but the main factors looked at include debt, equity, assets and interest expenses. An example of a leverage ratio is the debt-to-equity ratio.

#### Liquidity Ratios

A class of financial metrics that is used to determine a company's ability to pay off its short-term debt obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts. These ratios include the current ratio, the quick ratio and the operating cash flow ratio.

#### Non-Traditional Asset Classes

Alternative asset classes such as private equity, commodities and real estate.

#### Operational Ratio

A ratio that shows the efficiency of a company's management by comparing operating expense to net sales.

#### Price-to-Book Ratio (P/B Ratio)

A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share.

#### Price-to-Earnings Ratio (P/E Ratio)

A valuation ratio of a company's current share price compared to its per-share earnings.

#### Profitability Ratios

A class of financial metrics that are used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time. For most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the company is doing well. Some examples of profitability ratios are profit margin, return on assets and return on equity.

#### Qualitative Factors

Intangible factors of a company that are used as part of the process of assessing its health and future prospects.

#### Quality of Management

The quality of management activities and functions involved in the determination of quality policy and its implementation through means such as quality planning and quality assurance (including quality control).

#### Quantitative Factors

Considerations relevant to a decision that can be measured in terms of money or quantitative units.

#### Time Under Water (TUW)

Derived from the calculation of the drawdown, which is the maximum distance in time, from a previous peak to a new peak. In other words, it calculates how long it takes an investor to recover their money at the start of the maximum drawdown period.

#### Value

The strategy of selecting stocks that trade for less than their intrinsic values. Value investors actively seek stocks of companies that they believe the market has undervalued. The result is an opportunity for value investors to profit by buying when the price is deflated.

#### Value at Risk (VaR)

A technique used to estimate the probability of portfolio losses based on the statistical analysis of historical price trends and volatilities.

#### VIX

Volatility Index, the market's expectation of 30-day volatility.

#### Zero Cost Collars

A type of positive-carry collar that secures a return through the purchase of a cap and sale of a floor.