Super Finance Glossary

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Over 10,000 financial glossary terms...

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Expected Dividend Yield
Definition: Total amount of dividends received during the life of a futures contract or total dividends received for holding a particular stock one year. See: Current yield.
Expected Future Cash Flows
Definition: Projected future cash flows associated with an asset.
Expected Future Return
Definition: The return that is expected to be earned on an asset in the future. Also called the expected return.
Expected Rate Of Inflation
Definition: The public's expectations for inflation. These expectations determine how large an effect a given policy action by the Fed will have on economic activity.
Expected Return
Definition: The expected return on a risky asset, given a probability distribution for the possible rates of return. Expected return equals some risk-free rate (generally the prevailing U.S. Treasury note or bond rate) plus a risk premium (the difference between the historic market return, based upon a well diversified index such as the S&P 500 and the historic U.S. Treasury bond) multiplied by the asset's beta. The conditional expected return varies through time as a function of current market information.
Expected Return On Investment
Definition: The return one can expect to earn on an investment. See: Capital asset pricing model.
Expected Return-beta Relationship
Definition: Implication of the CAPM that security risk premiums will be proportional to beta.
Expected Spot Rate
Definition: The exchange rate between two currencies that is anticipated to prevail in the spot market on a given future date. It differs from the current spot rate primarily by the extent to which inflation expectations in the two currencies differ.
Expected Value
Definition: The weighted average of a probability distribution. Also known as the mean value.
Expected Value Of Perfect Information
Definition: The expected value if the future uncertain outcomes could be known minus the expected value with no additional information.
Expense Ratio
Definition: The percentage of the assets that are spent to run a mutual fund (as of the last annual statement). This includes expenses such as management and advisory fees, overhead costs, and 12b-1 (distribution and advertising) fees. The expense ratio does not include brokerage costs for trading the portfolio, although these are reported as a percentage of assets to the SEC by the funds in a Statement of Additional Information (SAI). The SAI is available to shareholders on request. Neither the expense ratio nor the SAI includes the transactions costs of spreads, normally incurred in unlisted securities and foreign stocks. These two costs can add significantly to the reported expenses of a fund. The expense ratio is often termed an Operating Expense Ratio (OER).
Expensed
Definition: Charged to an expense account, fully reducing reported profit of that year, as is appropriate for expenditures for items with useful lives under one year.
Experience Rating
Definition: A technique insurance companies use to determine the correct price of a policy premium.
Expiration
Definition: The time an option contract lapses.
Expiration Cycle
Definition: The recurring cycle of expiry months for which options on a particular security can be available. Basic options are placed in one of three cycles; Cycle 1 (the January/April/July/October, or the first month of each quarter); Cycle 2 (the second month of each quarter); or Cycle 3 (the third month of each quarter).
Expiration Date
Definition: The last day (in the case of American-style) or the only day (in the case of European-style) on which an option may be exercised. For stock options, this date is the Saturday immediately following the third Friday of the expiration month; brokerage firms may set an earlier deadline for notification of an option holder's intention to exercise. If Friday is a holiday, the last trading day will be the preceding Thursday.
Expiration Time
Definition: The time of day by which all exercise notices must be received on the expiration date. Technically, the expiration time is currently 11:59AM on the expiration date, but public holders of option contracts must indicate their desire to exercise no later than 5:30PM on the business day preceding the expiration date. The times are Eastern Time. See also Expiration Date.
Explicit Bankruptcy Costs
Definition: Specific costs incurred during the bankruptcy process such as legal fees, court costs, consultants' fees, and document preparation expenses.
Explicit Tax
Definition: A tax specifically collected by a government; includes income, withholding, property, sales, and value-added taxes and tariffs.
Exploding Term Sheet
Definition: Venture capital jargon. Often a proposed term sheet might explode or be null and void in a fixed period set to negotiate the final contract.
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