Average P/E Ratio

The P/E Ratio or Price/Earnings ratio is calculated by dividing the current market price of a share by its earnings per share. A higher P/E ratio reflects greater investor willingness to pay, while losses result in a P/E ratio of zero or nonexistent. 

Related Terms

Average Daily Volume

Average Daily Volume is the average number of securities traded daily over a specific period. It can fluctuate due to changing public perceptions of security and significantly influences stock prices, market liquidity, and overall trading activity in the financial markets.

Automatic Investment Plan

An Automatic Investment Plan (AIP), also known as a Systematic Investment Plan (SIP), involves regularly deducting a set amount from an investor’s bank account to invest in mutual fund units at the current market rate. SIPs can be set to daily, monthly, or quarterly intervals.

Assets 

Assets are all resources owned by a company, including money, securities, and real estate, that contribute to its financial value. They can be tangible or intangible and are listed on the balance sheet. Assets enhance company value, provide future benefits & can improve sales & cash flow.

Back End Load

A Back End Load or Exit Load is a commission or fee charged when an investor sells or exits a mutual fund. This fee is not applied by all fund houses and represents an additional cost that investors need to bear.

Balanced Mutual Fund 

A Balanced Mutual Fund invests in a mix of equity and debt assets, aiming to generate returns from both. It is designed for risk-averse investors seeking higher returns, providing a diversified investment option that balances potential growth with relative safety.

Basis

Basis is the difference between the futures price & the current cash price of the same commodity. It is calculated as the cash price minus the futures price. Changes in basis impact the effectiveness of futures as a hedging tool, typically using the nearest contract month.

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