Week One Terms
FIN/370: Finance for Business
October 15, 2010
Week One Terms
I. Finance: Finance can mean different meaning for different reasons. For businesses finance is a resource, it can be a liability, asset or stockholder equity. If borrowing finance from a company and say you borrow the money longer than a year that would be consider long term finance and the same goes as if you borrow finance for less than a year that would be consider short term finance.
II. Efficient Market: Efficient market is when the prices in the market is always fair it basically means that market price is related information.
III. Primary Market: Primary market is when dealing with finance the primary market deals with the exchange. When companies issue securities it is based on debt and equity. It means that when the company issues or sells securities to the investors they would give specific prices.
IV. Secondary Market: Secondary market is when the investors can purchase securities from other investors rather than issuing for their business.
V. Risk: Risk is when an actual return from an investment that wasn’t expected.
VI. Security: Security is from when stock represents right of ownership, which is known as securities. Securities can be from common stock, notes, bonds, or other financial assets.
VII. Stock: Stock is when the company earns assets; it is normally used when facing value.
VIII. Bond: Bond is usually referred when in debt, which also can describe a certain loan and a rate of an interest on a loan.
IX. Capital: Capital can be known as an amount which was invested by a specific owner of a company. When dealing with sole proprietor or a partnership the amount invested by the owners from the companies.
X. Debt: Debt is a required to be paid by the companies. It can also be known as a liability. Examples of debts can be loans, notes payable, capital lease and bonds.
XI. Yield: Yield can be known of a rate...