Financial Terms

FIN 370

Financial Terms

Finance - the study of how people and businesses evaluate investments and raise capital to fund them (Titman, 2011, pg. 4). Finance studies money and its management, it explores the allocation of resources (Mayo, 2012, pg. 1).

Efficient market -a market in which all the available information is fully incorporated into securities prices and the returns investors will earn on their investments cannot be predicted. In an efficient market, security prices reflect all available information at all times; and, because of this, it is impossible for an investor to consistently earn high rates of return without taking substantial risk. (Titman, 2011, pg. 213-218).

Primary market - a market in which new, as opposed to previously issued, securities are...