Fin/370 Defining Financial Terms

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Defining Financial Terms
March 7, 2013

Defining Financial Terms
1. Finance
a. The study of how people and businesses evaluate investments and raise capital to fund them 2. Efficient Market
b. Markets where all important information is available to all the different participants at the same time. The prices also correlate with the available information c. Stock markets are an example of efficient market

3. Primary Market
d. This is where the buyer and sellers negotiate and complete the business directly without a third party. e. Buying a home from the home owner
4. Secondary Market
f. It is a financial market where previously issued securities and financial instruments are bought and sold g. Bonds are an example of secondary market
5. Risk
h. The probability that the return on an investment will be lower than expected return i. Property investments or business investments can be risks 6. Security
j. A financing or investment instrument issued by a company or government agency that denotes an ownership interest and provides evidence of a debt a right to share in the earings of the issuer or a right in the distribution of a property. k. Bonds are a form of securities

7. Stock
l. A share of a company held by an individual or group m. A stock is a form of shareholders so an example would be purchasing stocks in the stock market or the company you work for. 8. Bond

n. A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing. o. Government bonds are an example of a bond
9. Capital
p. Cash or goods used to generate income either by investing in a business or a different income property. q. Having money to invest in a property which would be liquid assets. 10. Debt

r. An amount owed to an organization, person for funds borrowed. s. Credit...
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