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…show more content…
Its role in finance is just as it states in the definition, to tell the net worth of a company. ("Investorword", 2012). Debt Debt according to investorword is an amount owed to a person or organization for funds borrowed. The role that debt plays in finance is when you do not have all the funds you need to get something done you borrow it. ("Investorword", 2012). Yield The term yield according to investopedia means the income return on an investment. The role yield plays in finance is based on the investment cost it’s the current market value or its face value. ("Investopedia", 2012). Rate of Return The rate of return is the gain or loss on an investment over a specified period, expressed as a percentage increase over the initial investment cost. In finance a rate of return measurement can be used to measure virtually any investment vehicle. ("Investopedia", 2012). Return on Investment Return of investment or ROI is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. In finance ROI is a way to measure to see if an investment is worth the risk. ("Investopedia", 2012). Cash Flow Cash flow according to investopedia is a revenue or expense stream that changes
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