EAFE Index A stock index of European, Asian, and
Far Eastern stocks that is maintained by Morgan Stanley.
Early Withdrawal Penalty An economic penalty
that is assessed when an investor withdraws assets from an investment or
brokerage account. For example, Certificates of Deposit have penalties for
early withdrawal.
Earnings The net income that is produced by a
company.
Earning Per Share (EPS) The net income of a
company divided by the number of outstanding shares of the company's stock. A
frequently used benchmark for evaluating the relative price of stocks.
Earnings Per Share Momentum An increase in the
earnings per share growth rate from one reporting period to the next.
Earnings Surprises Positive or negative
differences between analysts' earnings forecasts and the actual earnings
produced by a company.
Economic Growth Rate The annual percentage rate
change in the Gross National Product.
Economic Indicators Quantitative information
that indicates the strength or weakness of the U.S. economy. Also, used to
measure trends that help determine the economy's future performance.
Economies of Scale The decrease in the marginal
cost of production as a company expands the rate of sale for a product.
Edgar Online A pay-to-view web site that
contains filings of documents for public corporations.
Effective Rate A measure of the time value of
money that reflects the impact of compounding.
Efficient Frontier Different combinations of
securities in portfolios that have various risks and return relationships. The
efficient frontier produces the maximum return for a given level of risk
exposure.
Efficient Market Theory Everything that can be
known about a stock is known and the information is reflected in the current
price of the stock. Therefore, all stocks are priced fairly in relation to each
other.
Efficient Portfolio A portfolio of securities
that produces the maximum amount of return based on the amount of risk
exposure.
Elliot Wave Theory A timing strategy that
predicts future price movement of markets and securities based on their
historical movement and the psychology of investors.
Emerging Markets The financial markets of
developing (less industrialized) countries.
Employee Retirement Income Security Act (ERISA)
Passed in 1974, a federal law that governs the establishment and operation of
private pension plans in the U.S.
Endowment Gift of money or property to an
institution for a specified purpose.
Enhanced Indexing An indexing strategy that uses
refinements to exceed the performance of the index by small margins. For
example, an index fund manager may select stocks that produce higher income to
increase the income return of the fund versus the index.
Enterprise Value The stock market valuation of a
company that is found by multiplying the company's outstanding shares by
current share price, less cash, plus current debt.
Equity An ownership interest in a company.
Stocks are a form of equity ownership. Some financial advisors refer to stocks
as equities. The equity market is the same as the stock market.
Estate Tax A federal tax that is imposed on an
individual's assets when they are distributed to heirs.
Euro The name for the common currency of most
European countries.
Exchange Traded Fund (ETF) A form of mutual fund
that trades on an exchange as a security and invests in a combination of
securities that replicate the performance of an index.
Ex-dividend The buyer of shares, when they are
quoted ex-dividend, is not entitled to the next dividend that is paid by the
issuer of the security.
Execution The process of completing the purchase
or sale of a security.
 
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