Fin/370 Week 1 Assignment

Topics: Investment, Finance, Bond Pages: 2 (636 words) Published: March 17, 2013
1.Finance is the process of raising funds or capital for any kind of expenditure. The role of finance in finance is basically involving business finance, personal finance, and public finance. 2.Efficient Market is one where the market price is an unbiased estimate of the true value of the investment. The role of efficient market in finance is that it studies the response of prices when all necessary information is available in the market. 3.Primary Market is a newly issued security is first offered and all subsequent trading of this security occurs is done in the secondary market. The role of primary market in finance is a vital part of the capital markets and underlying strength of the economy. 4.Secondary Market is when people buy and sell previously issued securities, such as stock exchanges, bond markets, and other entities that trade financial instruments. The role of secondary market in finance is that it provides a place for buyers to get rid of unwanted products without wasting them. 5.Risk is a probability or threat of damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities, and that may be avoided through preemptive action. The role of risk in finance is the probable ability of an investment to fail. 6.Security is a document that proves ownership of stocks, bonds, and other investments. The role of security in finance is that it allows businesses and individual investors to trade the securities issued by public corporations. 7.Stock is the subscribed capital of a corporation or limited liability company, usually divided into shares and represented by transferable certificates. The role of stock in finance is the contractual relationship between the companies and its stockholders or shareholders on the detail certificates set forth the division of the risk, income, and control of the business. 8.Bond is a loan contract issued by local, state, or national governments and by private...
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