Investment Glossary

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Generally accepted accounting principals (GAAP)

guidelines and rules for use by accountants in preparing financial statements. These principals, which evolved over a period of years, are designed to help ensure that financial data are presented fairly and are comparable from firm to firm and from industry to industry.

Geometric Mean

a measure of the compound rate of growth including dividends on a time weighted basis. Geometric mean is a better comparable measure of return for most analysis. See also Internal Rate of Return; Arithmetic mean.

Gross Domestic Product (GDP)

a standard measure of economic output (and growth) of a country, usually expressed in REAL terms (after inflation is taken into account). It is a measure of the value of all the goods and services produced and adjusted for duplication, (ie it is a 'value added' measure) duties, taxes and inflation.

Gross National Product (GNP)

Closely related to GDP. It is GDP minus the net 'factor income' paid to foreigners. Thus it measures the income arising from domestic production which is actually received by the residents of a country.

Growth fund

an investment company whose major objective is long-term capital growth. Growth funds offer substantial potential gains over time but vary significantly in price during bull and bear markets.

Growth share

the share of a firm that is expected to have above-average increases in revenues and earnings. These firms normally retain most earnings for reinvestment and therefore pay small dividends.

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