Financial Terms

In: Business and Management

Submitted By khahn
Words 3632
Pages 15

Appreciation - A currency is said to 'appreciate' when it strengthens in price in response to market demand.

Arbitrage - The purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market, in order to take advantage of small price differentials between markets

Ask (Offer) Price - The price at which the market is prepared to sell a specific currency in a Foreign Exchange Contract or Cross Currency Contract. At this price, the trader can buy the base currency. In the quotation, it is shown on the right side of the quotation. For example, in the quote USD/CHF 1.4527/32, the ask price is 1.4532; meaning you can buy one US dollar for 1.4532 Swiss francs.

At Best - An instruction given to a broker to buy or sell at the best rate that can be obtained.

At or Better - An order to deal at a specific rate or better.


Balance of Trade - The value of a country's exports minus its imports.

Bar Chart - A type of chart which consists of four significant points: the high and the low prices, which form the vertical bar, the opening price, which is marked with a little horizontal line to the left of the bar, and the closing price, which is marked with a little horizontal line of the right of the bar.

Base Currency - The first currency in a Currency Pair. It shows how much the base currency is worth as measured against the second currency. For example, if the USD/CHF rate equals 1.6215 then one USD is worth CHF 1.6215 In the FX markets, the US Dollar is normally considered the 'base' currency for quotes, meaning that quotes are expressed as a unit of $1 USD per the other currency quoted in the pair. The primary exceptions to this rule are the British Pound, the Euro and the Australian Dollar.

Bear Market - A market distinguished by declining prices.

Bid Price - The bid is the price at which the market…...

Similar Documents

Term Paper of Financial Market

... “FINANCIAL MARKET” IN PARTIAL FULFILLMENT OF THE REQUIREMENTS IN ECON. 101(ECONOMIC W/ TAXATION & LANDREFORM) SUBMITTED TO: MR. ANDASIL J. ABUBAKAR, M (PHIL) “Instructor” SUBMITTED BY: GROUP 1 STUDENTS 1st semester/ A.Y 2012-2013 PART 1- FINANCIAL MARKET INTRODUCTION Throughout his text, Mishkin stresses that the evolution of financial markets, both in the U.S. and throughout the world, has resulted from an intricate interplay of three factors: chance, necessity, and design. In short, history matters, and it matters a lot. In addition, throughout his text Mishkin consistently stresses the importance of information. He argues that it is impossible to understand the special nature of financial markets relative to markets for real goods and services unless one understands the peculiar types of "asymmetric information problems" intrinsically associated with financial assets. He argues that these asymmetric information problems have largely shaped the structure of financial markets in the past, and that the recent surge of innovations in information technology (IT) -- in particular, Internet-related IT -- is leading to a dramatic restucturing of financial markets today. The notes, below, provide basic background information on financial markets as covered in Mishkin in Chapters......

Words: 1588 - Pages: 7

Financial Terms

...Financial Terms and Roles Create a list of definitions for the following terms and identify their roles in finance: * Finance – Finance is the source through which a resource is provided. For example, cash is a resource, and where the cash comes from is the source. * Efficient market – A market where the values of all securities at any given time reflect all of the current available information, which results in the market value and intrinsic value being the same. * Primary market – Market where all securities are offered for the very first time for purchase to potential investors. The price at initial offering is the same for all buyers. * Secondary market - Market where all securities previously issued by a firm is traded again. The prices of securities on this market will differ from the initially offered price. * Risk – A likely variable associated with income streams or expected revenue. Risk is also known as the chance of difference. * Security – Bonds are a representation of a debt agreement, whereas Stocks are a representation of ownership. Securities can also be interest based or dividend based. * Stock – A Representation of ownership, or a claim to assets and earnings, within an issuing security or business. Stocks are classified into two different stocks, common and preferred. * Bond - A long term promissory note, or type of debt issued by a borrower. The borrower promises to pay the holder of a bond a predetermined and...

Words: 430 - Pages: 2

Financial Terms

...Financial Terms & Roles Finance is a study of how business and people interact with money. It can be with money that the businesses don’t have who needs to borrow, and to firms who earn to pay off the lenders and investors who started up the capital for the business. It’s a transaction. Efficient market is where business is fair, and the needed information is out to the public at the same time and prices are up-to-date, such as a stock market. Primary market is a new security that is bought for the first time. A key feature to primary market is that the firms selling securities receive money raised. Secondary market is where all the subsequent trading of previously owned securities take place. The firm does not receive any new financing and securities are sold simple one investor to another. The benefit is in its liquidity since it is as to buy/sell. Risk has a return trade-off. With investments, investors want a return and there is a risk involved in doing, sometime when companies don’t have a successful earning there is a loss in the investment with no return. Security is a negotiable instrument that represents a finance claim as form of ownership or by debt agreement. Stocks are securities that represents equity ownership of a company, which entitles you to vote the boards of the corporation, hold shares to the company’s success in a payment form of dividends and money value of security. Bonds are one of long-term debt and fixed income security market.......

Words: 412 - Pages: 2

Financial Terms

...I hope you will get benefitted from reading through this list and I know I got a nice refresher on some of the terms I don’t use every day…..Hope u guys are going 4 a simple brain storming.!!!!!!!!! Financial Terms Defined 1. Plan – A qualified retirement plan through an employer to which eligible employees can ake salary deferral (salary reduction) contributions on a post-tax and/or pretax basis. 2. Tax Sheltered Annuities – A qualified retirement plan for eligible employees of public schools, tax-exempt organizations and eligible ministers. Similar to a 401(k) plan but mainly for non-profit organizations. 3. Amortization – Paying off of debt in regular payments over a period of time. 4. Annuity – A financial product designed to grow an individual’s funds and then upon annuitization, pay a fixed payment for the designated number of periods. Annuities are used primarily as a way to secure cash flow during retirement years. 5. APR – Annual Percentage Rate. The annual cost of a loan; including all fees and interest. Expressed as a percentage. 6. APY – Annual Percent Yield. The annual return of an investment for a one-year period. This rate includes compounding, which makes it greater than the periodic interest rate multiplied by the number of periods. 7. Asset – Any resource that has economic value that an individual or corporation owns. Assets are generally viewed as resources that produce cash flow or bring added benefit to the individual or company. 8.......

Words: 1342 - Pages: 6

Financial Terms and Roles

...Financial Terms and Roles FIN/370 Vicky Tillman June 15, 2013 Financial Terms and Roles Create a list of definitions for the following terms and identify their roles in finance. 1. Finance- The study how people and business evaluate investments and reuse capital to fund them. 2. Efficient Market- Market where all pertinent information is available to all participants at the same time and where prices respond immediately to available information. 3. Primary Market- Financial market in which newly issued securities are offered to the public. 4. Secondary Market- Financial market where previously issued securities and financial instruments are bought and sold. 5. Risk- The probability that an actual return on an investment will be lower than the expected return. 6. Security- A financing or investment instrument issued by a company or government agency that denotes an ownership interest and provided evidence of a debt, a right to share in the earnings of the issuer, or a right in the distribution of a property. 7. Stock- The proportional part of a company's equity capital represented by fully paid up shares. 8. Bond- A written and signed promise to pay a certain sum of money on a certain date or on fulfillment of specified conditions. 9. Capital- Wealth in the form of money or assets taken as a sign of the financial strength of an individual organization, or nation, and assumed to be......

Words: 366 - Pages: 2

Financial Terms and Roles

...Financial Terms and Roles Katie Bradbury FIN/370 July 1, 2013 Derek Webster “Finance is the study of how people and businesses evaluate investments and raise capital to fund them” (Mayo, 2012). Finance is the practice of generating, moving and using currency, allowing the flow of money through a business in the same way of the money flow throughout the world. Efficient market is a market that holds all relevant information to contributors under the same roof, and where prices react instantly to accessible information. The best example for an efficient market would be the stock market. “Primary market is a market in which new, as opposed to previously issued, securities are bought and sold for the first time” (Mayo, 2012). By doing this people are able to help finance their new/old businesses. Secondary market a market where previously issued securities i.e. bonds, shares, notes and financial instruments like bills of exchange and certificates of deposit are purchased and sold. Stock exchanges do serve as secondary markets, this helps reduce the risk of investments and maintains liquidity in financial systems. Risk is the foundation for appraising all investments. Risk is one major concept of finance due to the greater the risk the greater the anticipated return. Security is an investment instrument that signifies an ownership position in a publicly traded corporation. A security is any fungible, negotiable financial instrument that represents......

Words: 614 - Pages: 3

Financial Terms

...Financial Terms and Roles Kay McCulloch FIN/370 Novemeber 18, 2013 Dr. Dee Barton Financial Terms and Roles Finance Finance is the study of how people and businesses evaluate investments and raise capital to fund them (Titman, Keown, Martin, 2011, Pg. 4). There are four principles of Finance. They are Money has a Time Value, There is a Risk-Return Tradeoff, Cash Flows are the source of value, and Market Prices Reflect Information. Efficient Market Efficient Market is one in which the flow of relevant information in regard to investment options is easily accessed and reliable ("What Is An Efficient Market?", 2013). Anyone who is involved in trade is able to make use of the information to assess the past performance of the security in question. They can accurately identify the reasons for the current unit price and can responsibly project the future performance of the security based on current indicator. Primary Market Primary Market is a market in which new, as opposed to previously issued, securities are bought and sold for the first time (Titman, Keown, Martin, 2011, Pg.26). This market is used for firms to issue new securities to raise money that they can then use to finance their business. Secondary Market A secondary market is where previously used securities are subsequently traded. In this market, the issuing firm does not receive any new finances on the securities already sold; it is just transferred from one investor to another (Titman, Keown, Martin,......

Words: 727 - Pages: 3

Financial Terms

...Financial Terms Finance for Business FIN 370 Financial Terms •Finance (D) Finance refers to money management by individuals, companies, and government. (R) Finance’s role in the business world is to maximize profits, evaluate investments in order to raise funds with as little risk as possible, which is possible if information is adequately interpreted. • Efficient market (D) The standards to which stock prices reflect all available and relevant information. (R) To assist in explaining the accuracy of market prices, it is an attempt to decrease inefficiencies in the market pricing. • Primary market (D) The market in which new (never been issued) securities are bought and sold for the first time. (R) The main role of the primary market is to assist businesses in raising funds by selling new stock. The firm selling the securities (stock) collects the monies from the sells. • Secondary market (D) This market sells and trades the previously issued securities. (R) The secondary market provides the individual security holder the opportunity to sell or trade their own securities to earn money; the gain or loss from the transaction does not affect the business because the person who bought the stock and not the business owns the security. • Risk (D) The possibility that the expected return can be different from what was projected. (R) Risk is part of business and usually the higher the risk the better the return. There are several examples of risk they can......

Words: 809 - Pages: 4

Financial Terms

...| Financial Terms and Roles | Individual Assignment | | FIN/370 | May 7, 2012 Kristopher Karazassis | | Financial Terms and Roles Finance is concerned with how individuals, such as managers, lenders, businesses, firms, investors, and borrowers allocate money over a specified period. This paper lists the definitions and roles of financial and accounting terms provided in the course design. The terminology that follows explains and interprets the concepts and elements relevant to the first week’s objectives and topics in Finance 370. Emphasis is placed on types of securities, markets, finance, equity, liability, ratios, and assets. Finance is the study of how people and businesses evaluate investments and raise capital to fund them. The key role of finance is the management of cash flow in deciding on investments, how to fund them, how to allocate money for day-to-day operations over time, and the interpretation of financial concepts, which is the central focus of finance. Efficient Market is a market price unbiased of the investments true mean value. The fact......

Words: 3334 - Pages: 14

Financial Terms

...Glossary of School Finance Terms Published by Wisconsin Association of School District Administrators (WASDA) And Wisconsin Association of School Business Officials (WASBO) January 2003 Acknowledgements We gratefully acknowledge the efforts of Nicholas C. A. Alioto and Roger J. Dickson of the Public Business Consulting Group, LLC for their efforts in compiling and authoring this document. The authors express their appreciation to the following individuals, who provided assistance with its development: Larry Krebs of the Neenah School District, Dennis Hanson of the Wisconsin Department of Public Instruction, Tom Griggs of Godfrey & Kahn, S.C. and Nelson Flynn of Michael Best & Friedrich, LLP. The definitions provided herein were compiled by the authors and rewritten using their own knowledge and definitions from the following sources: Wisconsin Department of Public Instruction, Robert W. Baird and Company, and the glossaries from the departments of public instruction from Indiana and Michigan. This publication may be reprinted without permission courtesy of the Wisconsin Association of School District Administrators and the Wisconsin Association of School Business Officials. A limited supply of additional copies are available for a fee. Contact the WASDA office for more information or go to or to view online. This publication was commissioned by the Wisconsin Association of School District Administrators and Wisconsin Association of School......

Words: 6820 - Pages: 28

Basic Financial Terms

...Although obtaining a job as a Financial Assistant will require administrative support in the financial/business functions of a unit. The individual will also need to be able to process and/or oversee the processing of financial/business forms as well as check, correct and maintains a variety of financial and other business records and documents. It will also be necessary to prepare or assists in preparing various financial or administrative reports, approve and process requisitions for supplies and equipment, prepare various payrolls, and initiate new procedures in accounting/business systems (Harvie Intranet for Employees. nd). Therefore understanding certain terms is necessary for such a position and this paper will define some of the terms required to ensure success in being a Financial Assistant. Introduction Finance assistants are often required to reply to questions regarding budgeting and know the policies and procedures of the company they work for, along with relevant legislation, such as the data privacy act. While, a degree in finance may not be needed, a course in Finance would be beneficial. Knowledge of certain terms would be prudent in being successful in the position. An office manager may request an assessment of some basic financial term in order to determine which candidate would be the best fit for the position. Below is a list of a few terms that may be asked along with their respective meaning. Net Financial Wealth Financial assets minus the......

Words: 1245 - Pages: 5

Financial Terms

...Capitalize: An accounting method to delay the recognition of expenses by showing them as long term assets. If a company buys an asset with long lifespan, it can extend its cost over a long time in order to avoid showing negative revenue. Capitalization: Adding the cost of acquiring the asset to the cost of the asset. Acid Test Ratio: Purchase Accounting: Financial Terms Forward Bidding- When we invite bid from others for auction. The settled amount will reach maximum value here. Reverse Bidding- when we set the upper cap on price and the participants bid for lower prices. The settled amount can reach a minimum here. Private Placement- When a company issues shares/securities to a select grp of investors (<49). Two types- preferential issue, QIP. In this, less regulatory clearances are required. Preferential Allotment of shares/ Preferential Issues- Process by which allotment of securities/share is done to a select group of investors. This is done because raising capital from public issue often takes time and is expensive. QIP (Qualified Institutional Placement)- When the company issues to select......

Words: 838 - Pages: 4

Financial Terms

...University of Dhaka Prepare to: Humaira Matin , lecturer Department of banking University of Dhaka ------------------------------------------------- Assignment on finacial terms ------------------------------------------------- Course code:204 ------------------------------------------------- Prepared by Maiful kausar ikra ------------------------------------------------- Roll No: 17023 ------------------------------------------------- Department of Banking Submission Date: 24-01-12 Assets: In common term, assets mean any tangible and intangible objects which have value to its processor. It can be defined as a source for future economic benefits or control past events. Tangible assets include plants, machineries, cash, trading stocks, and debtors. Intangible assets include goodwill, patents, copyright and trademark. Deferred debit also an asset. Cause it is treated as an asset to create income in future time. Liabilities: Liabilities are claims against assets that is existing debt and obligations. All business purchase merchandise on credit and borrow money from different sources to conduct their business. For example purchase on account is called account payable. Notes payable, wages payables, sales payable are also called liabilities. And the creditors claim must be paid before owners claims. Owner’s equity: The funds of an organization that have been provided by owners (i.e. its total assets less its total liabilities). The claims......

Words: 390 - Pages: 2

Financial Terms

...Finance – The study of how people and businesses evaluate investments and raise capital to fund them. Efficient market – A market in which prices correctly reflect all relevant information. Primary market – A market in which new, as opposed to previously issued, securities are bought and sold for the first time. Secondary market – Is where all subsequent trading of previously issued securities takes place. Risk – Is often defined as the standard deviation of the return on total investment. Security – A negotiable instrument that represents a financial claim. Stock – Ownership of a corporation indicated by shared, which represent a piece of the corporation’s assets and earnings. Bond – A long-term (10-year or more) promissory note issued by a borrower, promising to pay the owner of the security a predetermined amount of interest each year. Capital – Money that is used to generate income or make an investment. Debt – Money that has been borrowed and must be repaid. This includes such things as bank loans and bonds. Yield – The percentage return paid on a stock in the form of dividends, or the effective rate of interest paid on a bond or note. Rate of return – In securities, the amount of revenue an investment generates over a gien period of time as a percentage of the amount of capital invested. Return on investment – The money that a person or company earns as a percentage of the total value of the assets that are invested. Cash flow – A revenue or expense stream......

Words: 256 - Pages: 2

Financial Terms

...Defining Financial Terms Michael Cooks FIN/370 Finance for Business July 11, 2012 Christopher E. Carter, M.B.A., C.P.A. Defining Financial Terms Finance- is the study of how people and businesses evaluate investments and raise capital to fund them. Efficient market- A market whose prices quickly respond to the announcement of new information. Primary market-A part of the financial market where new security issues are initially bought and sold. Secondary market- The financial market where previously issued securities such as stocks and bonds are bought and sold. Risk- The potential that a chosen action or activity (including the choice of inaction) will lead to a loss (an undesirable outcome). 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). Stock- An instrument that signifies an ownership position in a corporation. Bond- A long-term (10-year or more) promissory note issued by a borrower, promising to pay the owner of the security a predetermined amount of interest each year. Capital- Cash or goods used to generate income either by investing in a business or a different income property. Debt- Money that has been borrowed and must be repaid. This includes such things as bank loans and bonds. Yield- The income return on an investment. This refers to the interest or dividends received from a security and......

Words: 412 - Pages: 2

SILVER!! (1) ONE Troy Pound LB U.S. Mixed Silver Coins Lot No Junk Pre-1965$124.86 13d left | HD Blue World Order | Nokia Keyboards