Financial Terms and Definitions Essay

1. birthFinance is the study of how people and businesses evaluate investments and raise capital to caudex them.2. Efficient marketEfficient market is the concept that all barter opportunities are fairly priced.3. Primary marketPrimary market is a part of the financial market where new security issues are initially bought and sold.4. Secondary marketSecondary market is the financial market where antecedently issued securities such as stocks and bonds are bought and sold.5. RiskRisk is the potential that a chosen action or activity (including the choice of inaction) will elapse to a redness (an undesirable outcome).6. SecuritySecurity is a transferrable instrument that represents a financial claim that has grade. Securities are broadly classify as debt securities (bonds) and equity securities (shares of common stock).7. StockStock is an instrument that signifies an self-control position in a corporation.8. BondBond is a semipermanent (10-year or more) promissory note issued by a borrower,promising to pay the owner of the security a predetermined amount of interest severally year.9. CapitalCapital is the amount of bullion and other assets owned by a business. These business assets include accounts receivable, equipment, and land/buildings of the business. Capital can too represent the accumulated wealth of a business, represented by its assets slight liabilities.10. DebtDebt is money that has been borrowed and must be repaid. This includes such things as bank loans and bonds.11. restorationYield 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 component based on the investments cost, its current marketvalue or its face value.12. Rate of returnThe gain or loss on an investment over a specified period, expressed as a percentage increase over the initial investment cost. Gains on investments are considered to be any income received from the security plus r ealized capital gains.13. Return on investmentA performance bank bill used to evaluate the readiness of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment the result is expressed as a percentage or a ratio.14. gold periodCash flow is a revenue or expense stream that changes a cash account over a given period. Cash inflows usually rig out from one of three activities financing, operations or investing although this also occurs as a result of donations or gifts in the case of personal pay. Cash outflows result from expenses or investments. This holds true for both business and personal finance