Business / Finance Glossary

Availability Float: Checks deposited by a company that have not yet been cleared.

Available On The Way In: In context of general equities, stock is available to new customer as trade initiated by another customer is about to be consummated (on the exchange floor). Usually said to an inquiring sal . . . View Full Definition

Average: An arithmetic mean return of selected stocks intended to represent the behavior of the market or some component of it. One good example is the widely quoted Dow Jones Industrial Average, whi . . . View Full Definition

Average (Across-Day) Measures: An estimation of price that uses the average or representative price of a large number of trades.

Average Accounting Return: The average project earnings after taxes and depreciation divided by the average book value of the investment during its life.

Average Age Of Accounts Receivable: The weighted-average age of all the firm's outstanding invoices.

Average Annual Return: The expected annual return on an investment, including interest and dividends, expressed as a percentage.

Average Collection Period, Or Days Receivables: The ratio of accounts receivables to sales, or the total amount of credit extended per dollar of daily sales (average AR/sales 365).

Average Cost: In the context of investing, refers to the average cost of shares or stock bought at different prices over time.

Average Cost Of Capital: A firm's required payout to bondholders and stockholders expressed as a percentage of capital contributed to the firm. Average cost of capital is computed by dividing the total required cost . . . View Full Definition

Average Daily Balance: A method for calculating interest in which the balance owed each day by a customer is divided by the number of days. See also: Adjusted balance method and previous balance method.

Average Down: A strategy used by investors to reduce the average cost of shares, in which the investor purchases more shares with a fixed amount of capital as the price of the shares decrease. The investo . . . View Full Definition

Average Equity: A customer's average daily balance in a trading account at a brokerage firm.

Average Life: Also referred to as the weighted-average life (WAL). The average number of years that each dollar of unpaid principal due on the mortgage remains outstanding. Average life is computed as the . . . View Full Definition

Average Maturity: The average time to maturity of securities held by a mutual fund. Changes in interest rates have greater impact on funds with longer average maturity.

Average Rate Of Return (ARR): The ratio of the average cash inflow to the amount invested.

Average Tax Rate: Taxes as a fraction of income; total taxes divided by total taxable income.

Average Up: A strategy used by investors to lower the overall cost of shares by buying as many shares with a given amount of capital in an increasing market. Buying $1000 worth of shares at $30, $35, $4 . . . View Full Definition

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