Fin 370 @Week 1 Essay

465 WordsOct 29, 20132 Pages
Finance Terms Jessie Calvillo FIN 370 08 October 2013 Dr. Bob Woerner Finance has several terms that is uses. Many of these terms are sued more often and others. Below are the definitions of these terms. Finance is defined as a science that is used to describe the management, creation and study of money, credit, investments, assets and liabilities for a company or a group of companies. This includes private and public companies, the government and it agencies, and the instruments they use to operate and produce revenue. Efficient Market states that is impossible to beat the market, or that an investor cannot obtain higher returns unless they purchase higher risk investments. Primary Market is the market in which new securities are issued on an exchange. These are done by underwriters, or investment banks, they set a starting price for the security and oversee the sales of them to investors. Secondary Markets are where investors purchase securities from other investors rather than the issuing authorities. Examples of these markets can be the NYSE or NASDAQ. Risk is defined as the chance an investments return will be different than the actual return expected. Securities are a financial instrument that represents a portion of ownership in a company (stock) or a creditor relationship with a government body (bond). It holds a value based on supply and demand and the risk associated with the return of the security. Stocks are a type of security the represents a portion of ownership in a company. Bonds are fixed income assets that are a debt investment in which an investor loans a company or government entity for a set interest rate.

More about Fin 370 @Week 1 Essay

Open Document