international portfolio, 320-322, 325 single region, 306 Currency effect, global equity risk factor model, 367 Currency exposure, equity risk factor models, 376-377 Currency forwards, 414, 446 Currency hedging, 104-105, 140-149, 441,457 Currency markets, forecasts across valuation measures, 464 Currency overlay, 469 Currency risk, 355, 440-441 Currency selection, global tactical asset allocation (GTAA), 474 Currency surprise, 320-322 Custodians, 411, 468 Custody, 411 Customized investment plans, 410 Customized portfolios, 429 Cyclical industries, 31 Daily data, risk monitoring program, 216 Data collection, in valuation, 288 DAX equity index, 301 Decay rate, covariance matrix, 236, 239-241,243 Default, 31,438 Default premium, 338-339, 344 Deferred taxes, 542-543, 567 Defined benefit plans, 102, 488-489 Degree of confidence, 85, 87, 172-173, 190 Dependencies, in risk plan, 254-255 Depreciation, global equilibrium, 60-61 Derivatives, 25, 28, 39, 224, 290, 468, 470-476 Developed markets, 93, 213, 371 Dilution effect, 296 Discount rates, 50 Disposal plans, 538, 542-543 Distressed debt investing, 442 Diversification: active risk management, 199 levels, 104-105, 110 Dividend(s): implications of, 46, 52, 281, 548, 565 payout ratios, 4 8 reinvestment, 541 Dodd, David, 416 Do liar-weighted returns, 281 Domestic equities: active risk management, 202 portfolio risk, 14-19 strategic asset allocation, 122-123 Dow, Charles Henry, 455-456 Downside scenarios, risk budgets, 257 Dow Theory, 456 Duration timing strategy, 444 Dynamic asset allocation, 113, 121, 125-126 Earnings growth, 48 Earnings quality anomaly, 421 Earnings to share price (E/P), 339-341, 359 Earnings-yield-gap timing model, 465 Economic and Monetary Union (EMU), 366 Economic growth, 247 Economic shocks, 366 Efficient frontier, 533-354, 561-562, 564, 571-573, 585, 587-591 Efficient market, 33, 42, 101 Efficient Markets Hypothesis, 456, 459 Efficient portfolio, 427-429 Eigenvalues, 346 Electronic communications networks (ECNs), 432 Emerging markets, 46, 93, 160-162, 213 Emerging-market debt (EMD), 442, 450 Empirical analysis, 424 Employee demographics, implications of, 111 Energy prices, 30 Enhanced active management, 26