Investment Glossary

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Variance

risk that is specific to an industry or firm. Examples of unsystematic risk include bad company management, labour problems, weather conditions or nationalisation of assets. This type of risk can be reduced by assembling a portfolio with significant diversification so that a single event will affect only a limited number of assets. Investment in most managed investment funds provides a quick and convenient way of reducing or eliminating unsystematic risk. - Also called diversifiable risk. - See also Systematic risk..

Venture capital

a statistical measure of the variability of measured data from the data's average value. A high variance, indicating relatively great variability, also indicates that the average is of less use in projecting future values for the data. Standard deviation is the square root of variance. Financial analysts use both statistical measures to weigh investment risk.

Venture-capital fund

a pool of risk capital, typically contributed by large investors, in which money is made available to young, small companies that have good growth prospects but are short of funds. Small investors can buy new issues or participate in mutual funds specialising in the

Volatility

an investment company that invests its shareholders' money in new, very risky, but potentially very profitable, business ventures.

Volume

Fluctuation in value.

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