Financial 370 Week 1 Terms Essay

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* Individual Assignment: Defining Financial Terms Resource: Financial management: Principles and applications Define the following terms and identify their roles in finance: • Finance – to pay for it ( Someone else putting up the money up front to buy something • Efficient market-A market in which the values of securities at any instant in time fully reflect all available information, which results in the market value and the intrinsic value being the same. A market that makes things easier by being able to provide information at any time. • Primary market - Transactions in securities offered for the first time to potential investors. Stocks that are offered for the very first time • Secondary market - The market in which stock previously issued by the firm trades. “Pre-bought” stocks, stocks that were bought originally but sold off, similar to secondhand items • Risk - an action that holds a chance of danger or failure. ( Something that can backfire • Security - means safety, as well as the measures taken to be safe or protected. ( To keep something secure or safe • Stock - the capital raised by a corporation through the issue of shares entitling holders to an ownership interest (equity) ( Part of a company that is worth money • Bond -A type of debt or a long-term promissory note, issued by the borrower, promising to pay its holder predetermined and fixed amount of interest each year. Something that is bought, that as it matures it gains value • Capital - assets available for use in the production of further assets. ( A product that can be used to gain more • Debt-Consists of such sources as credit extended by suppliers or a loan from a bank. The amount of money owed to someone • Yield – to be the cause or source of ( To be
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