Management

Dorica Irvin

Finance is the management of money in which an individual or a business decides how the money will be used to generate more revenue or profit. A key point in finance, which affects decisions, is the time value of money, which states that a dollar today is worth more than a dollar tomorrow. Finance measures the risks vs. profits and gives an indication of whether the investment is good or not.

Efficient market where all pertinent information is available to all participants at the same time, and where prices respond immediately to available information. Stock markets are considered the best examples of efficient markets.

Primary market is where investors can get first crack at a new security issuance. The issuing company or group receives cash proceeds from the sale, which is then used to fund operations or expand the business. Exchanges have varying levels of requirements which must be met before a security can be sold.

Secondary market a newly issued IPO will be considered a primary market trade when the shares are first purchased by investors directly from the underwriting investment bank; after that any shares traded will be on the secondary market, between investors themselves. In the primary market prices are often set beforehand, whereas in the secondary market only basic forces like supply and demand determine the price of the security.

Risk is a term often used to imply downside risk, meaning the uncertainty of a return and the potential for financial loss.

Security is generally a fungible, negotiable financial instrument representing financial value.

Stock a type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.

Bond indebted entity (issuer) issues a bond that states the interest rate (coupon) that will be paid and when the loaned funds (bond principal) are to be returned (maturity date). Interest on bonds is usually paid every six months...