Financial Terms and Roles

Financial Terms and Roles

Shannan Cousin

FIN 370: Finance for Business

November 24, 2013

Thien Ngo

In this paper I will outline the fourteen financial terms and roles for the following words finance, efficient market, primary market, secondary market, risk, security, stock, bond, capital, debt, yield, rate of return, return on investment and cash flow and identify their roles in finance in today’s business world.

Cousin (2012) these fourteen terms and roles are very essentials in today’s business world. Running the assets of any business is not just responsible for one or two things. Financial management is extensive then you might think. The lack of success of most business is high. Many businesses would like to think that if they have a good business model, everlasting enthusiasm and work continuously they are sure to succeed. The proof speaks differently. Many rudimentary businesses hit economic barriers because the owner/ manager does not understand how to manage the financial affairs of his or hers business.

The first term is finance “direct lending:” they acquire money given to you temporarily straight from a financial institution such as credit union or bank. In direct lending, the person who purchase agrees to pay the amount offered to loan, plus an agreed-upon finance charge, over a period of time. Finance is the managing enormous volumes of cash, by administrations or large companies.

The second term is efficient market. The best way that I can explain this is market where all significant facts is available to all persons who take party in activities at the same time, and where financial value reciprocate right away to presented facts. Prices responding immediately to available information would be like if something comes out about McDonald’s using bad chicken or something and their stock prices begin to fall immediately. Or if a big some any announces a merger with another big company and stock prices begin to rise immediately. ...