Cutoff Point

Cutoff Point
The point at which an investor decides whether or not a particular security is worth purchasing. The cutoff point is very subjective and will be based on the personal characteristics of the individual investor. Some examples of personal characteristics that may determine the cutoff point include the investor's required rate of return and his or her risk aversion level.

Because cutoff points are largely subjective, they will vary widely among investors. For example, if an investor has a lower required rate of return, he or she will likely pay more for the same security than a person with a higher required rate of return. This translates into a higher cutoff point for the first investor.

A cutoff point may also be considered a good "rule of thumb" when considering particular securities, as it may help the investor make more consistent investment decisions.

Investment dictionary. . 2012.

Игры ⚽ Нужно решить контрольную?

Look at other dictionaries:

  • Cutoff Point — ⇡ Cutoff Rate …   Lexikon der Economics

  • cutoff point — The lowest rate of return acceptable on investments. Bloomberg Financial Dictionary …   Financial and business terms

  • Cutoff Rate — Cutoff Point; Begriff der Investitionsrechnung für die von der Unternehmensleitung gewünschte effektive Mindestverzinsung für Investitionsprojekte. Vgl. auch ⇡ Ertragsrate …   Lexikon der Economics

  • Cutoff (steam engine) — In a steam engine, cutoff is the point in the piston stroke at which the inlet valve is closed. On a steam locomotive, the cutoff is controlled by the reverser. The point at which the inlet valve closes and stops the entry of steam into the… …   Wikipedia

  • cutoff — also cut off BrE noun 1 (C) a fixed limit or level at which you decide to or have to stop doing something: cutoff date/score/point (=the date etc when you stop doing something): The cutoff point for this sample was a score of 50% or more. 2… …   Longman dictionary of contemporary English

  • cutoff — Synonyms and related words: air line, arrest, beeline, bell, border line, bound, boundary, boundary condition, boundary line, bourn, break boundary, breakoff point, ceiling, check, checkmate, circumscription, compass, confine, cut, cutoff point,… …   Moby Thesaurus

  • cutoff — cut‧off [ˈkʌtɒf ǁ ɒːf] also cut off noun [singular] 1. the level at which you decide to stop doing something: • They will review the case and determine a cut off point at which Medicaid will no longer provide coverage. • There was a rush by… …   Financial and business terms

  • Cutoff — or cut off or cut off may refer to: Contents 1 Science and technology 2 Clothing and fashion 3 Roads and trails …   Wikipedia

  • Cutoff (disambiguation) — Cutoff may refer to: * Cutoff, a range of values to be considered in physics. * Cutoff (steam engine), the point in the piston stroke at which the inlet valve is closed. * Cutoff (metalworking), a piercing operation used to cut a workpiece from… …   Wikipedia

  • Point of Rocks (Kansas) — Point of Rocks, in Morton County, Kansas, was one of three landmarks by the same name on the Santa Fe Trail. This one was on the Cimarron cutoff. It is now part of Cimarron National Grassland.Point of Rocks has been an important landmark for… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”