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Pool factor |
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Pool factorThe outstanding principal balance divided by the original principal balance with the result expressed as a decimal. Pool factors are published monthly by the Bond Buyer newspaper for Ginnie Mae, Fannie Mae, and Freddie Mac (Federal Home Loan Mortgage Corporation) MBSs.Pool factor Similar MatchesFactor intensity uniformityFactor intensity uniformityThe absence of factor intensity reversals. Currency factorCurrency factorThe portion of a rate of return that is due to the currency in which the asset is denominated. The currency factor can be nonzero either because of currency risk or because of expected appreciation or depreciation. Factor marketFactor marketThe market for a factor of production, such as labor or capital, in which supply and demand interact to determine the equilibrium price of the factor. Price earnings growth factorPrice earnings growth factorThe PEG of a company is calculated by dividing its prospective P/E ratio by the estimated future growth rate in earnings per share of the company. So to calculate a PEG, you first need to calculate its P/E ratio.P/E = current share price divided by earnings per shareA company with a share price of 100p and earnings per share of 5p has a P/E ratio of 100/5 = 20.By itself the P/E ratio is a useful ratio because it shows how many times the current earnings the shares cost - in a sense, how many years you would have to wait to get your money back if the company paid out all its earnings to shareholders. But the limitation of the P/E ratio is that it looks at historical information and does not relate the price of the shares to its future performance. The PEG ratio builds in that extra layer of sophistication.Using the example of the same company, imagine that the consensus brokers' forecast for its future earnings growth rate is 15%.PEG = P/E divided by estimated future growth rateFor this company, the PEG would be 20 divided by 15 = 1.33.According to Jim Slater, the investor who popularised the use of PEG's as a stock share selection tool, a share with a PEG of 1 or lower is attractive. Put simply, the lower the PEG, the less you are being asked to pay for estimated future earnings. Jim Slater did not recommend use of the PEG as the only criteria of share selection. There are plenty of other fundamental checks that have to be made too.Note that the estimated future earnings are a critical part of the PEG calculation, and that if the forecasts made by brokers are wide of the mark, the PEG ratio will be unreliable. Because of this danger, most advocated of PEG's recommend using consensus forecasts, rather than the forecasts of any single broker/analyst. Factor proportionsFactor proportions1. The ratios of factors employed in different industries. See factor intensities. 2. The ratios of factors with which different countries are endowed. See factor endowments. Further SuggestionsFootloose factorFactor of production Reported factor Common factor Net benefit to leverage factor Factor mobility Factor space V Vacancy Factor Factor price Factor cost Discount factor Factor abundance Scarce factor Factor-saving Amortization factor Factor analysis Factor Proportions Model Single factor model Factor-using Risk factor Factor accumulation earnings factor Tariff factory Specific factors model International factor movement |
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