Secured Loans
Also called purchasing-power risk, the risk that changes in the real return the
investor will realize after adjusting for inflation will be negative.
Inflation uncertainty
The fact that future inflation rates are not known. It is a possible contributing
factor to the makeup of the term structure of interest rates.
Informational efficiency
The speed and accuracy with which prices reflect new information.
Information asymmetry
A situation involving information that is known to some, but not all, participants.
Information Coefficient (IC)
The correlation between predicted and actual stock returns, sometimes used to
measure the value of a financial analyst. An I.C. of 1.0 indicates a perfect linear
relationship between predicted and actual returns, while an I.C. of 0.0 indicates
no linear relationship.
Information-content effect
The rise in the stock price following the dividend signal.
Information costs
Transaction costs that include the assessment of the investment merits of a
financial asset. Related: search costs.
Informationless trades
Trades that are the result of either a reallocation of wealth or an implementation
of an investment strategy that only utilizes existing information.
Information-motivated trades
Trades in which an investor believes he or she possesses pertinent information
not currently reflected in the stocks price.
Information services
Organizations that furnish investment and other types of information, such as
information that helps a firm monitor its cash position.
