Finance Essay

654 WordsJun 27, 20123 Pages
finance Finance Week One Lynette Garay FIN/370 Ann Paxton April 23, 2012 Finance Week One Finance- the managements if large amounts of money. The role of finance in business is to be responsible for acquisition of funds, manage funds, and plan for spending of funds. Efficient Market- a market whose prices quickly respond to the announcement of new information. The role in finance is based on the fluctuation of stock market prices. Primary Market- a part of the financial market where new security issues are initially bought and sold. The role is to facilitate capital growth by enabling individuals to convert saving into investments. Secondary Market- the financial market where previously issued securities such as stocks and bonds are bought and sold. The role is to develop an efficient capital market and connects investors' favoritism for liquidity with the capital users' wish of using their capital for a longer period. Risk- the probability that a company may not have sufficient cash flows to operate, reimburse a loan or meet other financial commitments when they become due. The role of risk is to understand that a corporation may incur losses due to lack of repayment for goods and services based on the amount they borrowed. Security- 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). The role of security is to serve as collateral for a debt such that defaulting on the debt will result in the creditor seizing and selling the property Stock- an instrument that signifies an ownership position in a

More about Finance Essay

Open Document