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Defining Financial Terms 1

University of Phoenix
Inthiravanh Amphonephong
Defining Financial Terms
FIN/370
Jason Bruno
May 11, 2011

Defining Financial Terms 2
Financial Terms 1. FINANCE: A branch of economic that deals with resource management
ROLE: Finance is any area of study that helps get manage or invest the money. There is business finance, investment finance, home finance, car finance, and many other types. For most people managing their own money, personal finance is the most important type of finance.

2. Efficient Market: Market efficiency has varying degrees: strong, semi-strong, and weak stock prices in a perfectly efficient market reflect all available information. These differing levels, however, suggest that the responsiveness of stock prices to relevant information may vary. Essentially, it means that the market is performing as anticipated and has been not been effected by current news reports. This is good news for investors as it allows some level of predictability.
ROLE: Last week’s report on the U.S. increased unemployment rate had an impact on stock performance.

3. Primary Market: The primary markets are where investors can get first crack at a new security issuance. The issuing company or group receives cash proceeds from the sale, which is then used to fund operations or expand the business. Exchanges have varying levels of requirements which must be met before a security can be sold.

Defining Financial Terms 3
ROLE: Once the initial sale is complete, further trading is conducted on the secondary market, which is where the bulk of exchange trading occurs each day. Primary markets can see increased volatility over secondary markets because it is difficult to accurately gauge investor demand for a new security until several days of trading have occurred. This is a great financial

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