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Terms starting with V

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Risk & Portfolio Management

Value at Risk

The loss a portfolio is not expected to exceed over a stated period at a stated confidence level.

Parametric VaR = Portfolio Value x Z-score for the confidence level x Standard Deviation of Returns over the period ₹ Market Basics & Instruments

Value Stock

A share trading at a low price relative to accounting measures such as earnings, book value or cash flow.

Test: low P/E, low P/B or high earnings yield relative to the market and to the company's own history qualitative Fundamental Analysis & Valuation

Value Trap

A share that looks cheap on backward-looking multiples but is cheap because its business is deteriorating.

Test: the low multiple is explained by declining earnings power rather than by temporary pessimism, so the multiple stays low as earnings fall qualitative Risk & Portfolio Management

Variance

The average of the squared deviations of returns from their mean.

Variance = Sum of (Return - Mean Return) squared / Number of Observations % Derivatives, Futures & Options

Vega

The change in an option's price for a one-percentage-point change in implied volatility.

Vega = Change in Option Price / Change in Implied Volatility (per 1 percentage point) ₹ Risk & Portfolio Management

Volatility

The degree to which an asset's returns vary around their average, usually measured as annualised standard deviation.

Annualised Volatility = Standard Deviation of Daily Returns x square root of 252 % Market Basics & Instruments

Volume

The number of shares traded in a security over a stated period, counting each trade once.

Volume = total number of shares changing hands in the period shares Indicators & Oscillators

Volume Oscillator

The percentage difference between a short and a long moving average of volume.

Volume Oscillator = (Short-Period Volume MA - Long-Period Volume MA) / Long-Period Volume MA x 100 % Indicators & Oscillators

Volume Profile

A histogram showing how much volume traded at each price level over a chosen period, plotted horizontally.

For each price level, sum the volume of all trades executed at that level over the period examined shares Orders, Execution & Market Structure

Volume-Weighted Average Price

The average traded price over a period, weighted by the volume executed at each price.

VWAP = Sum of (Price x Volume) / Sum of Volume ₹ Corporate Actions, Dividends & Governance

Voluntary Delisting

A company's own decision to remove its shares from the exchange, requiring a public shareholder exit offer.

Test: the acquirer reaches the threshold shareholding through a reverse book-building or fixed-price exit offer approved by public shareholders qualitative Corporate Actions, Dividends & Governance

Voting Rights

The entitlement of an equity shareholder to vote on resolutions, normally one vote per share held.

Votes Held = Number of Equity Shares Held, unless the class carries differential rights shares