Q

Qualified plan
A tax deferred pension plan set up by an employer to enable employees to accumulate tax free savings for retirement benefits. Usually, contributions are made by employer and employee and when income is taken at retirement it is taxable.

Qualified stock option
A US stock option, given to executives and employees, which complies with the requirements of the Internal Revenue Service. A qualified stock option is not subject to tax at the grant date or when exercised.

Qualifying annuity
An annuity which is purchased within a qualified plan.

Qualitative Analysis
Securities analysis that uses subjective judgment based on nonquantifiable information, such as management expertise, industry cycles, strength of research and development, and labor relations. This type of analysis technique is different than quantitative analysis, which focuses on numbers. The two techniques, however, will often be used together.

Quantitative Analysis
A business or financial analysis technique that seeks to understand behavior by using complex mathematical and statistical modeling, measurement and research. By assigning a numerical value to variables, quantitative analysts try to replicate reality mathematically. Quantitative analysis can be done for a number of reasons such as measurement, performance evaluation or valuation of a financial instrument. It can also be used to predict real world events such as changes in a share price.

Quant Fund
An investment fund that selects securities based on quantitative analysis. In such funds, the managers build computer-based models to determine whether or not an investment is attractive. In a pure "quant shop" the final decision to buy or sell is made by the model. However, there is a middle ground where the fund manager will use human judgment in addition to a quantitative model.

Quartile
The investment industry ranks the performance of collective funds on the total returns (income + growth) they have produced for investors. The rankings divide the funds into sectors, so that growth funds are compared together, income funds are compared together, and balanced funds are compared together. The rankings list the funds in descending order, and the list is divided into four 'quartiles'. The best performing 25% are in in the '1st quartile' The next best performing 25% are in in the '2nd quartile' The next best performing 25% are in in the '3rd quartile' The worst performing 25% are in in the '4th quartile' So, if a sector contains 36 trusts, each quartile will contain 9 trusts. Trusts often advertise their performance over various periods by indicating, say, a first quartile ranking. In the above case that would indicate a position in the top 9. Investors need to be aware that when unit trusts advertise their past performance, they invariably select statistics that show them in a good light. Specific examples: Showing performance between two carefully selected dates. Look in the small print where they have to show a five year figure. Portraying the fund as a top performer, but only comparing growth figures with a small selection of rival firms. Failing to compare the figures with those of any rivals at all. Claims like 'leading ISA provider', 'top performer' and 'ranked first' which have ambiguous meanings. 'Ranked first', for instance, could mean that it was in the first quartile of performers which, in a field of 400, could mean that it was the 100th best performing fund.

Quick ratio
A financial ratio which is similar to the current ratio, but more stringent. It is defined as: current assets minus stocks, divided by current liabilities. It shows whether a company would be able to pay its debts if its creditors were hammering at the door AND it had no time to sell any of its stock. If the acid test is 1 or higher, a company passes the test.

Quotation
The highest bid price and the lowest offer price of a security available at any particular time.

Quote
The highest bid to buy and the lowest offer to sell a security in a given market at a given time. If you ask your Financial Advisor for a "quote" on a stock, he or she may come back with something like "45 1/4 to 45 1/2." This means that $45.25 is the highest price any buyer wanted to pay at the time the quote was given on the floor of the exchange and that $45.50 was the lowest price that any seller would take at the same time.