Duration
A measure of the sensitivity of the price of a bond or bond portfolio to changes in interest rates. Duration takes into account both the timing and size of a bond’s cash flows and is used by investors to manage interest rate risk.
Dividend Yield
The annual dividend per share divided by the stock’s price per share, expressed as a percentage. Dividend yield is used by investors to compare the dividend income generated by different stocks.
Dividend
A payment made by a corporation to its shareholders, usually as a distribution of profits. Dividends are typically paid in cash or additional shares of stock and are a key source of income for investors
Diversification
The practice of spreading investments across different assets or asset classes to reduce risk. Diversification can help investors mitigate the impact of market volatility and improve the overall risk-return profile of their portfolios.
Diversifiable risk
Risk that can be eliminated through diversification by investing in a variety of assets with low or negative correlations. Diversifiable risk, also known as unsystematic risk, includes company-specific factors and industry trends.
Discount Rat
The interest rate at which the Federal Reserve lends money to commercial banks. The discount rate is one of the tools used by central banks to control monetary policy and influence economic activity.
Derivatives
Financial instruments whose value is derived from the value of an underlying asset. Derivatives include options, futures, forwards, and swaps, and are used for hedging, speculation, and arbitrage.
Depreciation
The allocation of the cost of a tangible asset over its useful life for accounting and tax purposes. Depreciation reduces the book value of the asset on the balance sheet and reflects its gradual wear and tear or obsolescence
Deficit Spending
Government spending that exceeds tax revenues, resulting in a budget deficit. Deficit spending is often used to stimulate economic growth during recessions but can lead to higher levels of government debt if not properly managed.
Default
The failure of a borrower to fulfill its obligations under a loan agreement or bond issue. Defaults can result in financial losses for lenders and investors and may trigger legal actions to recover the outstanding debt.