Management 1010 Final (Finance)

Economics 1014 with Ryan at University of Missouri- Columbia

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By: George Rogers
Created: 2010-12-03
Size: 36 flashcards
Views: 84

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Time Value of Money

Principle that invested money grows over time by earning interest or other return

Compound Growth

Compounding of Interest paid to the investor over given periods- the more that is accumulated the more the investor earns over time.

Finance

Planning, obtaining, and managing the company's funds in order to accomplish its objectives.

Securities

Stocks and bonds representing secured, or asset-based, claims by an investor against an issuer.

Securities Markets

Market in which stocks and bonds are sold. Does not include mutual funds.

Primary- new stocks and bonds are bought and sold
Secondary-existing stocks and bonds are bought and sold.

Security and Exchange Commission (SEC)

Federal agency that administers US securities laws to protect the investing public and help to maintain a smooth functioning market.

Prospectus

A formal written statement filed with the SEC that sets forth a proposed business plan. Contains all the facts investors need to make an informed decision.

Insider Trading

Using insider knowledge to make a proffit off a security from a specific company.

Investment Bank

Financial institution engaged in issuing and reselling new securities.

advise companies when to buy and sell
underwrite- assume liability for the security sold

Stocks

portion of ownership in a cooperation

Par Value- face value at the time it is originally issued
Market Value- current price of a share in the stock market
Book Value- value of common stock, expressed as shareholders equity divided by the number of shares of stock.

Common Stock

most basic form of ownership in a company; you can vote in important issues.

Risky
High growth potential.

Blue-Chip Stock

issued by a well established company like IBM or Coca-Cola

Dividend

Payment to shareholders from the company's earning.

Stock Exchange

Organization of individuals coordinated to provide an institutional auction setting in which stocks can be bought and sold.

Electronic Communication Networks (ECNs)

electronic trading system that brings buyers and sellers together outside of traditional stock exchanges.

Stock Brokers

earn commission by executing buy and sell orders for outside customers.

Market Index

Designed to measure the performance of a large group of stocks or track the price changes of a stock market. Dow Jones= oldest/most widely used market index

Bull Market- rising stocks, 12 months or longer
Bear Market- falling stocks

The Riisk-Return Relalationship

safer investments do not reward as much as riskier investments..

Mutual Funds

company that pools investments from individuals and organizations to purchase a portfolio of stocks, bonds, and asset based investments.

Bond

Security in which an issuer pays a buyer a certain amount of money by a set date. w

Exchange Traded Funds (ETF)

bundle of stocks or bonds that are in an index that tracks the overall movement of the bundle, unlike mutual funds, it can be traded like stock.

Government Bond

issued by the federal government

Municipal Bond

issued by state or local government

Corporate Bond

issued by a company as a source of long-term funding.

Bond Indenture

legal document containing the complete details of a bond issue

Maturity Date

When the firm must repay the bond's face value.(short term bonds less than 5 years)

Diversification

buying several different kinds of investments rather than just one so the risk of loss is reduced by spreading out your investments.

Portfolio

Combined holdings of all the financial investments of any company or individual.

Secured Loan

asset-backed loan. Borrower pledges the asset as collateral to the lender

Loan Principle

the amount of monet that is loan must be repaid.

Unsecured Loan

a loan for which collaterall is not required

Angel Investors

outside investors that provide new capital for firms in return for a share of equity ownership.

Venture Capital

private funds from wealthy individuals or companies that seek investment opportunities in new growth companies.

Initial Public Offerings (IPOs)

first sale of a company's stock to the general public

Stock Split

If a company feels their stock is selling too high, they can stock split or a stock dividend paid in additional shares to shareholders, thus increasing the number of outstanding shares

Market Capitilization

the total dollar value of all the companies outstanding shares

About this deck

By: George Rogers
Created: 2010-12-03
Size: 36 flashcards
Views: 84

About StudyBlue

“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy