Examlex
While the portfolio return is a weighted average of realised security returns, portfolio risk is not necessarily a weighted average of the standard deviations of the securities in the portfolio.It is this aspect of portfolios that allows investors to combine shares and actually reduce the riskiness of a portfolio.
Interest Rate
The percentage charged on a loan or paid on savings over a specific period, representing the cost of borrowing or the reward for saving.
Amortization Debt
A loan repayment plan in which the borrower pays both interest and principal over time, gradually reducing the outstanding balance.
Loan
A sum of money that is borrowed, typically from a financial institution, which is expected to be paid back with interest.
Effective Annual Rate
The interest rate that reflects the compound interest rate paid or earned on an investment, loan, or other financial product over a year.
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