AIMA

See rate of return.

(1) A term of reference describing a unit of trading for a commodity future or option; (2) an agreement to buy or sell a specified commodity, detailing the amount and grade of the product and the date on which the contract will mature and become deliverable.

An approach that exploits discrepancies in the values of securities that have historically been almost identical - and assumes that they will ultimately become fairly priced and their values will converge.

A corporate bond that has a set maturity date, pays interest in the form of a coupon and gives the holder the option to convert the bond into a specific number of shares of the issuing company - in other words, it has an 'embedded option'. As it has the features of both a bond and stock, its valuation reflects both types of instrument.

Correlation  (R-squared) is a measure of the interdependence or strength of the relationship between two investments. It tells us something about the degree to which the variations of returns from their respective means move together. - If two investments are positively correlated, when one performs above its mean return, it is likely that the other will also perform above its own mean return. - If two investments are negatively correlated, when one performs above its mean return, it is likely that the other will perform below its mean return. Note that correlation says nothing about the mean returns themselves; they could both be up, or both down, or one could be up and one down.  To measure the strength of the relationship, we use the correlation coefficient.