Secueed Loan
See: annual percentage yield.
Annual fund operating expenses
For investment companies, the management fee and other expenses, including
the expenses for maintaining shareholder records, providing shareholders with
financial statements, and providing custodial and accounting services. For 12b-1
funds, selling and marketing costs are also included.
Annualized gain
If stock X appreciates 1.5% in one month, the annualized gain for that stock over
a twelve month period is 12*1.5% = 18%. Compounded over the twelve month
period, the gain is (1.015)^12 -1 = 19.6%.
Annualized holding period return
The annual rate of return that when compounded t times, generates the same t-
period holding return as actually occurred from period 1 to period t.
Annual percentage rate (APR)
The periodic rate times the number of periods in a year. For example, a 5%
quarterly return has an A.P.R. of 20%.
Annual percentage yield (APY)
The effective, or true, annual rate of return. The A.P.Y. is the rate actually earned
or paid in one year, taking into account the affect of compounding. The A.P.Y. is
calculated by taking one plus the periodic rate and raising it to the number of
periods in a year. For example, a 1% per month rate has an A.P.Y. of 12.68%
(1.01^12 -1).
Annual rate of return
There are many ways of calculating the annual rate of return. If the rate of return
is calculated on a monthly basis, we sometimes multiply this by 12 to express an
annual rate of return. This is often called the annual percentage rate (A.P.R.).
The annual percentage yield annual percentage yield (A.P.Y.), described above,
is used to include the affect of compounding interest.
Annuity
A regular periodic payment made by an insurance company to a policyholder for
a specified period of time.
