Fin370 Week Definitions

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Financial Terms and Roles

Lisa Guiel

FIN/370

Monday, April 15, 2013
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* Niki Silver
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* Finance-
* The study of how people and businesses evaluate investments and raise capital to fund them. *
* Efficient market-
* The assumption that financial markets are "informationally efficient." An efficient market would have all information on a given security and reflect it in the price immediately, which would in turn give investors a security of knowing the true value of a stock. *

* Primary market-
* Where new security are bought and sold into the financial market. Having a primary stock market allows companies to gain revenue and for investors to buy into a company. *
* Secondary market-
Where previously sold securities are bought and sold by other investors in the security market. This is important in finance because it gives investors a way to sell their stock for any given reason. * Risk-

* The possibility that shareholders will lose money while invested with a company. A risk has big weight in any decision not just in finance. Risk is the chance that one may lose money or assets. *

* Security-
* A negotiable instrument that represents a tradable asset. *
* Stock-
* Something that shows that an investor has ownership in a company and has a right to its profit. This allows corporations to sell stock to gain assets and for investors to join the company and earn dividends. *

* Bond-
* A long-term (10 years or more) note by the borrower, promising to pay the owner of the security a certain amount of interest each year the loan is in affect. *
* Capital-
* Money used to make and investment. Gaining capital can allow companies to start new ventures and...
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