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Q

Fifth letter of a NASDAQ stock symbol specifying that it is in bankruptcy proceedings.

Quadratic programming

Variant of linear programming whereby the objective function is quadratic rather than linear. For example, in portfolio selection, we will often minimize the variance of the portfolio (which is a quadratic function) subject to constraints on the mean return of the portfolio.

Qualitative research

Traditional analysis of firm specific prospects for future earnings. While it is based on data collected by the analyst, there is no formal quantitative framework used to generate projections.

Q ratio or Tobin's Q ratio

Market value of a firm's assets divided by replacement value of the firm's assets.

Quality option

Also called the swap option, the seller has choice of deliverables in Treasury Bond and Treasury note futures contract. Related: cheapest to deliver issue

Quality spread

Also called credit spread, the spread between Treasury securities and non-Treasury securities that are identical in all respects except for quality rating. For instance, the difference between yields on Treasuries and those on single A-rated industrial bonds.

Quantitative research

Use of advanced econometric and mathematical valuation models to identify the firms with the best possible prospectives. Antithesis ofqualitative research.

Quantos

Currency options with a guaranteed exchange rate that enable buyers who like the asset, German bonds for example, but not the asset's pricing currency, to arrange to be paid in a different currency for a fee.

Quanto swap

See: differential swap.

Quick assets

Current assets minus inventories.

Quick ratio

Indicator of a company's financial strength (or weakness). Calculated by taking current assets less inventories, divided by current liabilities. This ratio provides information regarding the firm's liquidity and ability to meet its obligations. Also called the Acid Test ratio.

Quotation

Used in the context of general equities. Highest bid and lowest offer (asked) price currently available on a security or a commodity. Insider market.

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