Definition
Finance is science, which explains about the management, creation, money, banking, credit, investment, assets and liabilities. The finance has financial systems. It has public, private, and government phases. There are three types of finance public, corporate, and private finance.
Efficient Market
An investment that states impossible to beat the market because the stock market efficiency causes the existing price to the corporate, EMH says, the stock always fall value on stock exchanges. It is impossible to outperform in the overall market based on the expert stock selection. The efficient market deals with the market research and efficiency.
Primary Market
A market issues new chances on the exchange. The primary market is used to facilitate under writing group. The primary market has the investment banks, in which the sale is directly to the investors.
Secondary Market
A market where the investors purchase assets from the other investors. The national stock exchange called New York stock exchange and NASDAQ depends and works on secondary market. The secondary market exists on the other securities. The cash directly goes in to the investor’s hand.
Risk
Change in the investment’s actual return; different income than expected. The risk includes the possibility of losing the original investments. The change in the expected return is called as the risk. The different version of the risk is measured and calculated using the standard deviation. Many companies allocate the large amount of money for the risk management. The risk management speaks about the lot of other facts.
Security
The financial instrument that represents the ownership position is called security. It involves the publically traded corporation, relationship in government body. A security negotiable in the financial instruments; it also represents some type of the financial values. The security is the special type of financial term.
Bonds
Debt investment depends on the investors loan; money to an entity. The borrowed of the loans at the fixed rate of interest; bonds are used by the company municipalities in term of the financial projects and activities. The bonds are commonly known as the fixed income security.
Stock
The stock is a type of security that signifies the ownership. The ownership is the part of the assets in the corporation. There are two types of the stock; common and preferred. The common stock entitles the owners to vote the shareholder. A person having the preferred stock has the voting rights.
Capital
Capital means many things. The specific definition depends on the context used. Commonly, it is known as financial resource available for use. The companies associated with the more capital better than the less capital.
Debt
Any debt instrument that bought or sold between the two parties has the basic terms defined as not the loan amount and the interest rate. Debt security includes the government bonds, corporate bonds, CDS, municipal bonds, etc. The interest rate on a debt security depends on the borrower.
Yield
The yield is the investment return. It is referred as the interest received in the security and usually expressed annually as the percentage based.
Rate of Return
The gain or loss of the investment over the specified period; it is expressed as the percentage increase over the initial investment. Gains are considered as the income received.
Return on Investment
A performance measure, which is used to find the efficiency of the investment to calculate the ROI = Gain from investment – Cost of the investment/ cost of the investment.
Cash Flow
A revenue is the expense stream that changes cash account over a given period. Cash outflow result from the expense investments.
References
1. Financial Definition. (2014). Retrieved Mar 10, 2014, from http://www.investopedia.com/terms/c/cashflow.asp
