Fin370 terms wk1
Definitions
FIN/370
Timothy Stegeman Definitions
The language of finance has terminology that is specific to organizational statements, calculations, and presentation of income items that relate to a company’s business. Financial principles are not only important for companies but individual planning involves a degree o strategic financial planning to achieve desirable results.
Time value of money definition relates to the “worth of the dollar today, tomorrow, and in the future. It is a critical consideration in business, economic, and personal annuity investments. Time values of money can help a company determines future sums of money resulting from an investment” (W.sons, 1995).
Efficient Market is a” theory that securities prices correctly measure the current value of a firm’s future earnings and dividends. This theory asserts that securities markets are so competitive that the current price of a stock properly values the firm’s future earnings and its dividend”. (Mayo, 2012).
Primary versus secondary market: a” primary market is a market where securities are bought and sold for the first time. A secondary market is a subsequent trading of previously issued securities” (Mayo, 2012).
Risk-return trade-off: risk is the analysis of the propensity for a “possible loss” or on the company’s investments verses the anticipation that the return will benefit the company (Mayo, 2012). Futhermore, the company will not take on additional risk unless the end result will be additional return. (chp4, Mayo, 2012)
Agency (principal and agent problems): “Financial markets and intermediaries borrow from one group and lend to another, a process that channels resources into productive investments” (Chapter 2,p 1,Mayo, 2012). The principle owner facilitates indirect transfer of goods or resources in various depository institutions or money market fund for return on the investments or extension of capital. The relationship could be volitale if the transfer agents are not
FIN/370
Timothy Stegeman Definitions
The language of finance has terminology that is specific to organizational statements, calculations, and presentation of income items that relate to a company’s business. Financial principles are not only important for companies but individual planning involves a degree o strategic financial planning to achieve desirable results.
Time value of money definition relates to the “worth of the dollar today, tomorrow, and in the future. It is a critical consideration in business, economic, and personal annuity investments. Time values of money can help a company determines future sums of money resulting from an investment” (W.sons, 1995).
Efficient Market is a” theory that securities prices correctly measure the current value of a firm’s future earnings and dividends. This theory asserts that securities markets are so competitive that the current price of a stock properly values the firm’s future earnings and its dividend”. (Mayo, 2012).
Primary versus secondary market: a” primary market is a market where securities are bought and sold for the first time. A secondary market is a subsequent trading of previously issued securities” (Mayo, 2012).
Risk-return trade-off: risk is the analysis of the propensity for a “possible loss” or on the company’s investments verses the anticipation that the return will benefit the company (Mayo, 2012). Futhermore, the company will not take on additional risk unless the end result will be additional return. (chp4, Mayo, 2012)
Agency (principal and agent problems): “Financial markets and intermediaries borrow from one group and lend to another, a process that channels resources into productive investments” (Chapter 2,p 1,Mayo, 2012). The principle owner facilitates indirect transfer of goods or resources in various depository institutions or money market fund for return on the investments or extension of capital. The relationship could be volitale if the transfer agents are not