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Scott, MIT Graduate
Category: Homework
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Experience:  MIT Graduate (Math, Programming, Science, and Music)
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Define the following terms and identify their roles in finance.

Customer Question

Define the following terms and identify their roles in finance. Please be sure to provide the reason why these terms are important in finance and provide at least three references other than your text or “-pedias”.

I have the terms defined. I just need help with why they are important in finance.

o    Finance

o    Efficient market

o    Primary market

o    Secondary market

o    Risk

o    Security

o    Stock

o    Bond

o    Capital

o    Debt

o    Yield

o    Rate of return

o    Return on investment

o    Cash flow

1. A branch of economics concerned with resource allocation as well as resource management, acquisition and investment. Simply, finance deals with matters related to money and the markets.

2. To raise money through the issuance and sale of debt and/or equity.
Efficient Market:
Market where all pertinent information is available to all participants at the same time, and where prices respond immediately to available information. Stockmarkets are considered the best examples of efficient markets.
Primary Market:
1. Market in which buyers and sellers negotiate and transact business directly, without any intermediary such as resellers.
2. Financial market in which newly issued securities are offered to the public.
Secondary Market:
Financial market where previously issued securities (such bonds, notes, shares) and financial instruments (such as bills of exchange and certificates of deposit) are bought and sold. All commodity and stock exchanges, and over-the-counter markets, serve as secondary markets which (by providing an avenue for resale) help in reducing the risk of investment and in maintaining liquidity in the financial system.
The quantifiable likelihood of loss or less-than-expected returns.
An investment instrument, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity.
1. Equity capital raised through sale of shares.
2. Proportional part of a firm's equity capital represented by fully paid up shares.
A type of debt or a long-term promissory note, issued by the borrower, promising to pay its holder a predetermined and fixed amount of interest each year.
Measure of the accumulated financial strength of an individual, firm, or nation, created by sacrificing present consumption in favor of investment to generate future returns above investment costs.
Duty or obligation to pay money, deliver goods, or render service under an express or implied agreement. One who owes, is a debtor or debitor; one to whom it is owed, is a debtee, creditor, or lender. Use of debt in a firm's financial structure creates financial leverage that can multiply yield on investment provided returns generated by debt exceed its cost. Because the interest paid on debt can be written off as an expense, debt is normally the cheapest type of long-term financing.
Annual income earned from an investment, expressed usually as a percentage of the money invested.
Rate of return:
The rate of return on an investment, expressed as a percentage of the total amount invested. Rate of return is usually, but not always, calculated annually. also called return.
Return on Investment :
ROI. A measure of a corporation's profitability, equal to a fiscal year's income divided by common stock and preferred stock equity plus long-term debt. ROI measures how effectively the firm uses its capital to generate profit; the higher the ROI, the better.
Cash Flow:
A measure of a company's financial health. Equals cash receipts minus cash payments over a given period of time; or equivalently, net profit plus amounts charged off for depreciation, depletion, and amortization.
Submitted: 7 years ago.
Category: Homework
Expert:  Chris12 replied 7 years ago.

Is there a specific word count for this assignment? The assignment is asking for 3 references, does that mean 3 references for each word or 3 references all together that helps define each word.

Customer: replied 7 years ago.
3 References total. No specific word count. Thanks
Expert:  Chris12 replied 7 years ago.
You're welcome. When is it due?
Customer: replied 7 years ago.
tonight by 10pm.
Customer: replied 7 years ago.
I'd be willing to pay a little more for it be done by that time.
Customer: replied 7 years ago.
Is anyone able to help me with this?
Customer: replied 7 years ago.
is anyone able to help me with this?
Expert:  Chris12 replied 7 years ago.
Did you still need help with the assignment, I wasn't able to finish it by 10pm last night?
Customer: replied 7 years ago.
No I do not, Do you know how I get the question off line, so I dont get charged for it?
Thanks, XXXXX
Expert:  Manal Elkhoshkhany replied 7 years ago.

Hello Amy


Please note that you do not get charged (and experts do not get paid) unless you click the Accept button, so as long as you did not click that button, you will not be charged


All the best


P.S. I have answered your two other posts