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Finance Term and Roles

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Financial Terms and Roles
Joy Cobb
October 19, 2012
FIN 370
Amy Grover

In finance there are many terms that one has to know and understand in order to know what to do. Some terms are more important than others and some you need to know in order to have an understanding of the basics of finance. Some of the important terms are finance, efficient market, primary market, secondary market, risk, security, stock, bonds, capital, debit, yield, return on investment, and cash flow. If you want to be in the business work of finance, or in the business world in general one must know and come to understand these terms.

Finance

According to dictionary.com finance is the management of revenues; the conduct or transaction of money matters generally, especially those affecting the public, as in the fields of banking and investment. Finance in general is how companies and people manage their money. ("Dictionary", n.d.).
Efficient Market According to investopedia market efficiency championed in the efficient market hypothesis (EMH) formulated on a particular stock and or bond market. Thus, according to the EMH, no investor has an advantage in predicting a return on a stock price because no one has access to information not already available to everyone else. ("Investopedia", 2012).
Primary Market Investopedia defines primary market as a market that issues new securities on an exchange. Underwriting groups, which consist of investment banks that will set a beginning price range for a given security and then oversee its sale directly to investors, facilitates primary markets. The role that primary markets play in finance is that it allows investors to get a first crack at a new security issuance. ("Investopedia", 2012). Secondary Market Secondary market is a market where investors purchase securities or assets from other investors,

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