Horizon Analysis

Method of measuring the discounted cash flow (time-adjusted return) from an investment, using time periods or series (horizons) that differ from the investment's contractual maturity. The horizon date might be the end of a Business Cycle or some other date determined in the perspective of the investor's overall portfolio requirements. Horizon analysis calculations, which include reinvestment assumptions, permit comparison with alternative investments that is more realistic in terms of individual portfolio requirements than traditional Yield-To-Maturity calculations.