TERMS AND DEFINITIONS
American Depositary Receipt (ADR) is a negotiable certificate issued by a U.S. bank representing a specific number of shares of a foreign stock traded on a U.S. stock exchange. ADRs make it easier for Americans to invest in foreign companies, due to the widespread availability of dollar-denominated price information, lower transaction costs, and timely dividend distributions.
Call Option is a short-term contract entitling the purchaser, in return for a premium paid, the right to buy the underlying security at a specified price upon exercise of the option at any time prior to its expiration. Writing a covered call is the selling of a call option for an equity that is currently held in the portfolio. If the underlying security reaches the strike price of the option, the writer of the option is obligated to deliver the number of shares for which the call option is written.
Cash Flow equals cash receipts minus cash payments over a given period of time.
Debt/Capital Ratio is a measurement of a company's financial leverage.
Dividend Yield is calculated by dividing annual dividends per share by the current price per share.
Market Capitalization represents the total value of a company's outstanding equity securities.
MSCI EAFE Index is an unmanaged market capitalization-weighted index based on the average weighted performance of widely held common stocks.
Price/Earnings (P/E) refers to the price of a stock divided by its trailing 12-month earnings per share.
Price to Book (P/B) refers to the measurement of a stock's market value to its reported book value.
Russell 2000 Value Index measures the performance of small-cap value segment of the U.S. equity universe. It includes those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.
S&P 500 Index is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. One cannot invest directly in an index.
Turnover Ratio is the percentage of a fund's assets that have changed over the course of a given time period, usually a year. Mutual funds with higher turnover ratios tend to have higher expenses.