A performance-based index is a stock index that adds the amount of all dividend payments, capital gains and other cash disbursements to the net stock price. When measuring the performance over a given time period, the performance-based index will add these transactions to the net share price before calculating the index return. In contrast, a non-performance index calculates returns
What Is a Performance Bond? A performance bond is a financial guarantee to one party in a contract against the failure of the other party to meet its obligations. It is also referred to as a contract bond. A performance bond is usually provided by a bank or an insurance company to make sure a
What Are Performance Bonuses? A performance bonus is a form of additional compensation paid to an employee or department as a reward for achieving specific goals or hitting predetermined targets. A performance bonus is compensation beyond normal wages and is typically awarded after a performance appraisal and analysis of projects completed by the employee over
What Is Peak Pricing? Peak pricing is a form of congestion pricing where customers pay an additional fee during periods of high demand. Peak pricing is most frequently implemented by utility companies, which charge higher rates during times of the year when demand is the highest. The purpose of peak pricing is to regulate demand
What Is a Peak-To-Valley Drawdown? A peak-to-valley drawdown is a fund’s or money manager’s largest cumulative percentage decline in portfolio value. It is defined as the percentage decline from the fund’s highest value (peak) to the lowest value (trough) after the peak. Funds that have been in existence for long periods of time may have
What Is the Pearson Coefficient? The Pearson coefficient is a type of correlation coefficient that represents the relationship between two variables that are measured on the same interval or ratio scale. The Pearson coefficient is a measure of the strength of the association between two continuous variables. Understanding the Pearson Coefficient To find the Pearson
What Is Peer Perform? Peer perform is an investment rating that sell-side analysts use when a given security provides returns consistent with those of other companies in its sector. A peer perform is a neutral assessment; it predicts a security will move in line with similar companies. Only a minority of sell-side research operations currently use the
What is Peer Review? Peer review is the process by which scholar’s assess the quality and accuracy of one another’s research papers. Peer review is most frequently employed within academia, where professors evaluate each others’ work before it is published in major academic research journals. Key Takeaways Peer review is the process by which academic
What Is Peer-to-Peer (P2P) Lending? Peer-to-peer (P2P) lending enables individuals to obtain loans directly from other individuals, cutting out the financial institution as the middleman. Websites that facilitate P2P lending have greatly increased their adoption as an alternative method of financing. P2P lending is also known as “social lending” or “crowd lending.” It has only
What Is a Peer-To-Peer (P2P) Economy? A peer-to-peer (P2P) economy is a decentralized model whereby two individuals interact to buy sell goods and services directly with each other or produce goods and service together, without an intermediary third-party or the use of an incorporated entity or business firm. In a peer-to-peer transaction, the buyer and
