Financial Terms and Roles

In: Business and Management

Submitted By yolandagreen1974
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Financial Terms and Roles

* Financial Terms * *
Finance- the study of how people and businesses evaluate investments and raise capital to fund them
Efficient market-Market where all pertinent information is available to all participants at the same time, and where prices respond immediately to available information.

Primary market- a market in which new, as opposed to previously issued, securities are bought and sold for the first time
Secondary market- where all subsequent trading of previously issued securities take place
Risk- probability or threat of damage, injury, liability, loss or any other negative occurrence causing external or internal vulnerabilities
Security- a negotiable instrument that represents a financial claim
Stock- security that represents equity ownership
Bond- debt that has matured longer than ten years and is sold in the capital market
Capital- A form of money, or assets taken as a sign of financial strength of an individual, organization, or nation available for developing or investing
Debt- money that a business owes
Yield- a percentage of invested money annually earned from an investment
Rate of return- The loss or gain of an investment over a period of time
Return on investment- the earning power of assets
Cash flow- incoming and outgoing operating activities of an organization in the form of cash * * Roles *
Finance- finance refers to capital budgeting, capital structure decisions, and working capital management; management and interpretation of information
Efficient market- the price reflects important information about the intrinsic value of the asset
Primary market- firms issue new securities to raise money to help finance business
Secondary market- sold securities are transferred from one investor to another
Risk- using financial risk ratios to determine the prospect of an…...

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