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University of Phoenix Material
Definitions
Define the following terms using your text or other resources. Cite all resources consistent with APA guidelines.
Term
Definition
Resource you used
Time value of money
The idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received
Investopedia - Time Value of Money - TVM. (2014). Retrieved from http://www.investopedia.com/terms/t/timevalueofmoney.asp
Efficient market
A market in which prices quickly respond to the announcement of new information book Primary versus secondary market that the primary market deals with the newly issued securities while the secondary market deals with already traded securities. When the companies issue securities in the primary market, they collect funds directly from the investors through the securities sales. But, in the secondary market the money earned from selling a security does not go to the company. The money thus earned goes to the investor who sells the security.
Finance Maps of the World. (2013-2014). Retrieved from http://finance.mapsofworld.com/capital-market/primary-vs-secondary.html
Risk-return tradeoff
The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with low potential returns, whereas high levels of uncertainty (high-risk) are associated with high potential returns. According to the risk-return tradeoff, invested money can render higher profits only if it is subject to the possibility of being lost.
Investopedia - Risk-Return Tradeoff. (2014). Retrieved from http://www.investopedia.com/terms/r/riskreturntradeoff.asp
Agency (principal and agent problems)
Conflicts of interest and moral hazard issues that arise when a principal hires an agent to perform specific duties
Definitions
Define the following terms using your text or other resources. Cite all resources consistent with APA guidelines.
Term
Definition
Resource you used
Time value of money
The idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received
Investopedia - Time Value of Money - TVM. (2014). Retrieved from http://www.investopedia.com/terms/t/timevalueofmoney.asp
Efficient market
A market in which prices quickly respond to the announcement of new information book Primary versus secondary market that the primary market deals with the newly issued securities while the secondary market deals with already traded securities. When the companies issue securities in the primary market, they collect funds directly from the investors through the securities sales. But, in the secondary market the money earned from selling a security does not go to the company. The money thus earned goes to the investor who sells the security.
Finance Maps of the World. (2013-2014). Retrieved from http://finance.mapsofworld.com/capital-market/primary-vs-secondary.html
Risk-return tradeoff
The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with low potential returns, whereas high levels of uncertainty (high-risk) are associated with high potential returns. According to the risk-return tradeoff, invested money can render higher profits only if it is subject to the possibility of being lost.
Investopedia - Risk-Return Tradeoff. (2014). Retrieved from http://www.investopedia.com/terms/r/riskreturntradeoff.asp
Agency (principal and agent problems)
Conflicts of interest and moral hazard issues that arise when a principal hires an agent to perform specific duties