Financial Terms and Definitions Essay

1. financeFinance is the study of how people and dutyes respect enthronization fundss and raise capital to fund them.2. cost-effective merchandiseplaceEfficient mart is the fantasy that all trading opportunities are middling priced.3. Primary marketPrimary market is a part of the financial market where new security issues are initially bought and sold.4. Secondary marketSecondary market is the financial market where previously issued securities such(prenominal) as stocks and bonds are bought and sold.5. attemptRisk is the potential that a chosen implement or activity (including the choice of inaction) dissolving agent lead to a loss (an unwanted outcome).6. SecuritySecurity is a on the table instrument that represents a financial usurp that has determine. Securities are broadly classified as debt securities (bonds) and equity securities (shares of common stock).7. declineStock is an instrument that signifies an ownership position in a corporation.8. BondBond is a lon g-term (10-year or more) promissory observation issued by a borrower,promising to right the owner of the security a preset amount of interest each year.9. chief cityCapital is the amount of cash and some other assets owned by a line of descent. These business assets include accounts receivable, equipment, and land/buildings of the business. Capital give the axe also represent the accumulated wealthiness of a business, represented by its assets slight liabilities.10. DebtDebt is money that has been borrowed and must be repaid. This includes such things as bank loans and bonds.11. exitYield is the income furnish on an coronation. This refers to the interest or dividends received from a security and is unremarkably expressed annually as a plowshare based on the enthronements cost, its current marketvalue or its face value.12. Rate of returnThe gain or loss on an enthronement oer a specify period, expressed as a percentage increase over the initial investment cost. Gains on investments are considered to be some(prenominal) income received from the security plus agnize capital gains.13. Return on investmentA performance measure employ to evaluate the efficiency of an investment or to compare the efficiency of a go of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment the result is expressed as a percentage or a ratio.14. change flowCash flow is a revenue or expense blow that changes a cash account over a given period. Cash inflows normally arise from one of three activities financing, trading operations or investing although this also occurs as a result of donations or gifts in the case of personal finance. Cash outflows result from expenses or investments. This holds true for both business and personal finance