- Tactical asset allocation (TAA)
- An asset allocation strategy that allows active
departures from the normal asset mix based upon rigorous objective measures of
- Tangible asset
- An asset whose value depends on particular physical properties.
These include reproducible assets such as buildings or machinery and non-
reproducible assets such as land, a mine, or a work of art. Related: Intangible asset
- Tax-exempt sector
- The municipal bond market where state and local governments
raise funds. Bonds issued in this sector are exempt from federal income taxes.
- Technical analysts
- Also called chartists or technicians, analysts who use mechanical
rules to detect changes -in the supply of and demand for a stock and capitalize on the
- Technical descriptors
- In the model for calculating fundamental beta, ratios in the
market variability risk index which rely on market-related data.
- Related: Technical analysts
- To offer for delivery against futures.
- Term bonds
- Often referred to as bullet-maturity bonds or simply bullet bonds, bonds
whose principal is payable at maturity. Related: Serial bonds
- Term life insurance
- A contract that provides a death benefit but no cash build-up or
investment component. The premium remains constant only for a specified term of
years, and the policy is usually renewable at the end of each term.
- Term repo
- A repurchase agreement with a term of more than one day.
term structure of interest rates The relationship between the yields on otherwise
comparable securities with different maturities, often depicted as a yield curve.
- Term to maturity
- The time remaining on a bond's life, or the date on which the debt
will cease to exist and the borrower will have completely paid off the amount
- Term trust
- A closed-end fund that has a fixed termination or maturity date.
- Theoretical futures price
- Also called the fair price, the equilibrium futures price.
- Theoretical spot rate curve
- A curve derived from theoretical considerations as
applied to the yields of actually traded Treasury debt securities because there are no
zero-coupon Treasury debt issues with a maturity greater than one year. Like the
yield curve, this is a graphical depiction of the term structure of interest rates.
- Also called time decay, the ratio of the change in an option price to the
decrease in time to expiration.
- Three-phase DDM
- A version of the dividend discount model which applies a
different expected dividend rate depending on a company's life-cycle phase, growth
phase, transition phase, or maturity phase.
- Refers to change in price, either up or down. Related: Point
- Tick-test rules
- SEC-imposed restrictions on when a short sale may be executed,
intended to prevent investors from destabilizing the price of a stock when the market
price is falling. A short sale can be made only when either (1) the sale price of the
particular stock is higher than the last trade price (referred to as an uptick trade) or (2)
if there is no change in the last trade price of the particular stock, the previous trade
price must be higher than the trade price that preceded it (referred to as a zero
- Tilted portfolio
- An indexing strategy that is linked to active management through the
emphasis of a particular industry sector, selected performance factors such as
earnings momentum, dividend yield, price-earnings ratio, or selected economic factors
such as interest rates and inflation.
- Time decay
- Related: Theta
- Time deposit
- Related: Certificate of deposit
- Time premium
- Also called time value, the amount by which the option price exceeds
its intrinsic value.
- Time value of an option
- Related: Time premium
- Time value
- The market value of an option minus its intrinsic value; that is, the
difference between the option premium and the amount, if any, that the option is
in-the-money. Related: In-the-Money
- Time-weighted rate of return
- Related: Geometric mean return
- Timing option
- For a Treasury bond or note futures contract, the seller's choice of
when in the delivery month to deliver.
- Top-down equity management style
- A management style that begins with an
assessment of the overall economic environment and makes a general asset
allocation decision regarding various sectors of the financial markets and various
industries. The top-down manager then selects a portfolio of individual securities
within the favored sectors.
- Total asset turnover
- The ratio of net sales to total assets.
- Total debt to equity ratio
- A capitalization ratio comparing current liabilities plus long-
term debt to shareholders' equity.
- Total return
- In performance measurement, the actual rate of return realized over
some evaluation period. In fixed income analysis, the potential return that considers
all three sources of return (coupon interest, interest on interest, and any capital
gain/loss) over some investment horizon.
- Tracking error
- In an indexing strategy, the difference between the performance of
the benchmark and the replicating portfolio.
- Trade house
- A firm which deals in actual commodities.
- One of several related securities offered at the same time.
- Trade date
- In an interest rate swap, the date that the
counterparties commit to the swap.
- Transactions costs
- Related: Round-trip transactions costs, Information costs, Search costs
- Transition phase
- A phase of development in which the company's earnings begin to
mature and decelerate to the rate of growth of the economy as a whole. Related: Three-phase
- Related: Treasury securities
- Treasury bills
- Debt obligations of the U.S. Treasury that have maturities of one year
- Treasury bonds
- Debt obligations of the U.S. Treasury that have maturities of 10
years or more.
- Treasury notes
- Debt obligations of the U.S. Treasury that have maturities of more
than 2 years but less than 10 years.
- Treasury securities
- Securities issued by the U.S. Department of the Treasury.
- The general direction of the market.
- Treynor Index
- A measure of the excess return per unit of risk, where excess return
is defined as the difference between the portfolio's return and the risk-free rate of
return over the same evaluation period and where the unit of risk is the portfolio's
beta. Related: Sharpe Index
- 12b-i funds
- Mutual funds that do not charge an upfront or back-end commission, but
instead take out up to 1.25% of average daily fund assets each year to cover the
costs of selling and marketing shares, an arrangement allowed by the SEC's Rule
12b- I (passed in 1980).
- Two-factor model
- Black's zero-beta version of the capital asset pricing model.
- Two-fund separation theorem
- The theoretical result that all investors will hold a
combination of the risk-free asset and the market portfolio.
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