Financial Terms

Week 1

FIN/370

Jonathan G. Castro

Kurt Meyer

Finance- is a field within economics that deals with the allocation of assets and liabilities over time under conditions of certainly and uncertainly

Efficient Market- The idea that the price of a stock or other investment at any given time is an accurate reflection of the value of that investment

Primary Market- The market for new securities issues. In the primary market the security is purchased directly from the issuer.

Secondary Market- A market in which an investor purchases a security from another investor rather than the issuer, subsequent to the original issuance in the primary market.

Risk- The quantifiable likelihood of loss or less-than-expected returns. EX: currency risk and inflation risk

Security- An investment instrument, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity.

Stock- A share of a company held by an individual or group.

Bond- A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing.

Capital- Cash or goods used to generate income either by investing in a business or a different income property. The money, property, and other valuables which collectively represent the wealth of an individual or business.

Debt- An amount owed to a person or organization for funds borrowed.

Yield- The annual rate of return on an investment, expressed as a percentage.

Rate of Return- The rate of return