Submitted by: Submitted by loma
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Category: Business and Industry
Date Submitted: 11/11/2012 11:49 AM
Financial Terms
FIN/370
October 15, 2012
• Finance – Study of how people and businesses evaluate investments and raise capital to fund them. Finance is about management of money.
• Efficient market - A market whose prices quickly respond to the announcement of new information. Information analyzed and used by investors to make financial decisions.
• Primary market - A part of the financial market where new security issues are initially bought and sold. Brings investors together with businesses looking for financing.
• Secondary market - The financial market where previously issued securities such as stocks and bonds are bought and sold.
• Risk - The uncertainty associated with any investment. That is, risk is the possibility that the actual return on an investment will be different from its expected return.
• Security - A negotiable instrument that represents a financial claim that has value. Securities are broadly classified as debt securities (bonds) and equity securities (shares of common stock).
• Stock - An instrument that signifies an ownership position in a corporation.
• Bond - A long-term (10-year or more) promissory note issued by a borrower, promising to pay the owner of the security a predetermined amount of interest each year.
• Capital - funds provided by lenders (and investors) to businesses to purchase equipment for producing goods/services, or physical goods that assist in the production of other goods and services, or saved-up financial wealth, especially that used to start or maintain a business.
• Debt - Money that has been borrowed and must be repaid. This includes such things as bank loans and bonds.
• Yield - The percentage return paid on a stock in the form of dividends, or the effective rate of interest paid on a bond or note.
• Rate of return - The gain or loss on an investment over a specified period, expressed as a percentage increase over the initial investment cost
• Return on...