# Latest Terms

### Future Value Factor

Future value factor is the equivalent value at some future date of a cash flow at time 0 or an annuity series of cash flows that occur after equal time interval. It is used to calculate the future value of a single sum or future value of an annuity or annuity due by multiplying the cash flow with the relevant future value factor.

### Upper Limb

Upper limb (also called upper extremity) is the region of human body which extends from the shoulder girdle to the hand. It is divided into four parts.

### Variance

Variance is another statistical tool which tells how much a data is diverging from the mean. It is the mean of the squared differences. Where the differences refer to the difference between the mean and the individual values. Its scale is in the range of square of the maximum value.

### Standard Deviation

Standard deviation is the tendency of the data to differ from the mean. Mean, median and mod estimate the midpoint of the data standard deviation tells how much the data is spread out. Standard deviation is the square root of the variance.

### Capitalization-weighted Index

Capitalization-weighted Index (also called cap-weighted or value-weighted index) is a capital market index in which the constituent securities are weighted based on their market capitalization, which equals the product of its price per share and total number of common shares outstanding.

### Cumulative Preferred Stock

Cumulative preferred stock (also called cumulative preference shares) is a class of preferred stock whose dividends accumulate if they are not paid in any year and must be paid in future before any dividends are paid to common stockholders.

### Tobin's q

Tobin’s q is the ratio of market value of a company’s assets to the replacement value of those assets. The market value of assets can be estimated as the sum of market value of the company’s equity and book values of its debt and the replacement value can be considered as equal to the book value of total assets.

### Required Rate of Return

Required rate of return is the minimum return in percentage that an investor must receive due to time value of money and as compensation for the risks of the investment. There are multiple models to work out required rate of return on equity, preferred stock, debt and other investments.

### Producer Price Index

Producer price index (PPI) is a measure of average prices received by producers of domestically produced goods and services. It is calculated by dividing the current prices received by the sellers of a representative basket of goods by their prices in some base year multiplied by 100.

### Maturity Premium

Maturity premium is the component of required return that accounts for the additional interest rate risk and reinvestment risk of an investment with longer time till maturity. Maturity risk premium increases with increase in the time to maturity. It can be estimated by comparing securities which are identical except for the difference in their time to maturity.