Financial Terms

and

Financial Terms and Roles

FIN/370

April 29, 2012

Karina Campos

Financial Terms and Roles

1. Finance

Finance is primarily about the management of money, a key component of finance

is the management and interpretation of information. (Finance is used in many ways. Especially when owning a company. You need to finance your money. Meaning budgeting and seeing where you want your money to go to.)

2. Efficient Market

The concept of efficient markets describes the extent to which information is incorporated into security prices. (Efficient market is very tricky when it comes to investors. They have to be very risky when it comes to the stock market to hopefully keep an efficient market.)

3. Primary Market

A primary market is a market in which new, as opposed to previously issued, securities are bought and sold for the first time. (Primary market is used by companies that are trying to raise money. The market firms issue new securities to help finance their business. The cool thing about the primary market is that the companies that actually do sell securities do get paid.)

4. Secondary Market

The financial market where previously issued securities such as stocks and bonds are bought and sold. (Secondary market is almost the same thing as a primary market, but a secondary market comes in after the securities has been bought and sold again. Basically the gift that keeps on giving.)

5. Risk

The goal of these markets is to provide investors with opportunities that best fit their risk and return objectives, while at the same time to provide businesses with opportunities to raise funds—to train employees, do research, and build new plants—at prices that appropriately reflect the prospects of the business.. (Risk is finance can mean a lot of things. The one thing that did catch my eye was good return by taking risk. Basically in any job you have you might take risk, some good some bad. But you...