SPECIAL MEMORANDUM ACCOUNT Definition

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SPECIAL MEMORANDUM ACCOUNT (SMA) is a sub-account of a margin account for excess equity. It can be withdrawn or used to buy more securities.

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LINEAR PROGRAMMING (LP), in accounting, is the mathematical approach to optimally allocating limited resources among competing activities. It is a technique used to maximize revenue, contribution margin, and profit function; or, to minimize a cost function, subject to constraints. Linear programming consists of two ingredients: (1) objective function and (2) constraints, both of which are linear. In formulating the LP problem, the first step is to define the decision variables that one is trying to solve. The next step is to formulate the objective function and constraints in terms of these decision variables.

ABNORMAL RETURNS is the difference between the actual return and that is expected to result from market movements (normal return).

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