Fin370 Week Definitions
Financial Terms and Roles
Lisa Guiel
FIN/370
Monday, April 15, 2013 * * Niki Silver * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Finance- * The study of how people and businesses evaluate investments and raise capital to fund them. * * Efficient market- * The assumption that financial markets are "informationally efficient." An efficient market would have all information on a given security and reflect it in the price immediately, which would in turn give investors a security of knowing the true value of a stock. * * Primary market- * Where new security are bought and sold into the financial market. Having a primary stock market allows companies to gain revenue and for investors to buy into a company. * * Secondary market-
Where previously sold securities are bought and sold by other investors in the security market. This is important in finance because it gives investors a way to sell their stock for any given reason. * Risk- * The possibility that shareholders will lose money while invested with a company. A risk has big weight in any decision not just in finance. Risk is the chance that one may lose money or assets. * * Security- * A negotiable instrument that represents a tradable asset. * * Stock- * Something that shows that an investor has ownership in a company and has a right to its profit. This allows corporations to sell stock to gain assets and for investors to join the company and earn dividends. * * Bond- * A long-term (10 years or more) note by the borrower, promising to pay the owner of the security a certain amount of interest each year the loan is in affect. * * Capital- * Money used to make and investment. Gaining capital can allow companies to start new
Lisa Guiel
FIN/370
Monday, April 15, 2013 * * Niki Silver * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Finance- * The study of how people and businesses evaluate investments and raise capital to fund them. * * Efficient market- * The assumption that financial markets are "informationally efficient." An efficient market would have all information on a given security and reflect it in the price immediately, which would in turn give investors a security of knowing the true value of a stock. * * Primary market- * Where new security are bought and sold into the financial market. Having a primary stock market allows companies to gain revenue and for investors to buy into a company. * * Secondary market-
Where previously sold securities are bought and sold by other investors in the security market. This is important in finance because it gives investors a way to sell their stock for any given reason. * Risk- * The possibility that shareholders will lose money while invested with a company. A risk has big weight in any decision not just in finance. Risk is the chance that one may lose money or assets. * * Security- * A negotiable instrument that represents a tradable asset. * * Stock- * Something that shows that an investor has ownership in a company and has a right to its profit. This allows corporations to sell stock to gain assets and for investors to join the company and earn dividends. * * Bond- * A long-term (10 years or more) note by the borrower, promising to pay the owner of the security a certain amount of interest each year the loan is in affect. * * Capital- * Money used to make and investment. Gaining capital can allow companies to start new
References: Investopedia. (2013). Definition of Cash Flow. www.investopedia.com/definition-cashflow/ Titman, S., Keown, A. J., & Martin, J. D. (2011). Financial management: Principles and applications (11th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall.