Fin 370

Topics: Bond, Investment, Stock Pages: 3 (461 words) Published: August 28, 2012
Financial Terms and Definitions

Your Name


April 5, 2012

Professor Professor Name

1. Finance:

Finance is the study of how people and businesses evaluate investments and raise capital to fund them.

2. Efficient market:

Efficient market is the concept that all trading opportunities are fairly priced.

3. Primary market:

Primary market is a part of the financial market where new security issues are initially bought and sold.

4. Secondary market:

Secondary market is the financial market where previously issued securities such as stocks and bonds are bought and sold.

5. Risk:

Risk is the potential that a chosen action or activity (including the choice of inaction) will lead to a loss (an undesirable outcome).

6. Security:

Security is a negotiable instrument that represents a financial claim that has value. Securities are broadly classified as debt securities (bonds) and equity securities (shares of common stock).

7. Stock:

Stock is an instrument that signifies an ownership position in a corporation.

8. Bond:

Bond is a long-term (10-year or more) promissory note issued by a borrower,

promising to pay the owner of the security a predetermined amount of interest each year.

9. Capital:

Capital is the amount of cash and other assets owned by a business. These business assets include accounts receivable, equipment, and land/buildings of the business. Capital can also represent the accumulated wealth of a business, represented by its assets less liabilities.

10. Debt:

Debt is money that has been borrowed and must be repaid. This includes such things as bank loans and bonds.

11. Yield:

Yield is the income return on an investment. This refers to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment's cost, its current...
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