Defining financial terms

Other phenomena include the January effectthe pattern of stock prices falling near the end of one calendar year and rising at the beginning of the next.

The bank then lends these deposits to borrowers. Typically, there is a tax due to the state or federal government at one's death. Banks allow borrowers and lenders, of different sizes, to coordinate their activity. But while there may be a handful of entrepreneurs who are truly financially savvy, the majority cringe at the thought of preparing financial statements and managing their books.

The deployment of capital is decided by the budget.

15 Financial Terms Every Business Needs to Know

Methods for retirement plans include taking advantage of government allowed structures to manage tax liability including: Identify relevant objectives and constraints: Personal finance may involve paying for education, financing durable goods such as real estate and cars, buying insurancee.

For example, it has been discovered that human emotions and decisions made because of them play a large role in many aspects of the financial world.

A pump is primed or prepared for use by pouring water into it to produce suction. The most popular financial definitions: Corporate Finance Businesses obtain financing through a variety of means, ranging from equity investments to credit arrangements.

Using net present value calculators, the financial planner will suggest Defining financial terms combination Defining financial terms asset earmarking and regular savings to be invested in a variety of investments.


This asset allocation will prescribe a percentage allocation to be invested in stocks either preferred stock or common stockbonds for example mutual bonds or government bonds, or corporate bondscash and alternative investments.

Furthermore, many modern financial theories resemble scientific or mathematical formulas. Close Financial Dictionary One of the main sources of financial dictionary is the financial glossary by Campbell R. Financial risk managementan element of corporate finance, is the practice of creating and protecting economic value in a firm by using financial instruments to manage exposure to riskparticularly credit risk and market risk.

Lenders earn a return on their loans while simultaneously helping improve individuals' standard of living and benefiting the local society and economy.

42 Important Financial Terms You Should Know

Another method is equity financing — the sale of stock by a company to investors, the original shareholders they own a portion of the business of a share. Here are 15 essential finance terms every entrepreneur needs to know.

Furthermore, certain investors have been able to consistently outperform the broader market for long periods of time, most notably famed stock-picker Warren Buffettwho at the time of this writing is the second-richest individual in the U.

State and local governments also receive grants and aid from the federal government. Achieving these goals requires projecting what they will cost, and when you need to withdraw funds that will be necessary to be able to achieve these goals. Modern forms of social finance also include some segments of microfinancespecifically loans to small business owners and entrepreneurs in less developed countries to enable their enterprises to grow.

Recently, economists have repeatedly stressed widespread education in matters of personal finance as integral to the macro performance of the overall national economy.

Financial Dictionary

This obsolete Americanism was current in the 19th century. It usually encompasses a long-term strategic perspective regarding investment decisions that affect public entities. Rather than an outright donation, these investments take the form of equity or debt financing, in which the investor seeks both a financial reward as well as a social gain.

He is considered by some to be one of the most successful investors in the world. In general, the goals of each of the above activities are achieved through the use of appropriate financial instruments and methodologies, with consideration to their institutional setting.

Financial Terms

He is known as a quantitative investor and in founded Renaissance Technologiesa private hedge fund based in East Setauket, NY. This may include the objective of business, targets set, and results in financial terms, e. Please note that this information is not intended to be used in place of a consultation or advice of a financial professional.

This time she appeared at the Italian Village, and within two weeks she had pulled it out of the red ink and into the black. Is Finance an Art or a Science? Social impact bonds also known as Pay for Success Bonds or social benefit bonds are a specific type of instrument that acts as a contract with the public sector or local government.

The human element of fear also played a part the reason a dramatic fall in the stock market is often called a "panic".

The Atlantic Monthly, March, in the black Making a profit; out of debt. A firm might take out a loan from a bank or arrange for a line of credit.


Typically, as one's income grows, a higher marginal rate of tax must be paid. The cash budget is basically a Defining financial terms plan that shows all expected sources and uses of cash when it comes to spending it appropriately.

Modern financial theories, such as the Black Scholes modeldraw heavily on the laws of statistics and mathematics found in science; their very creation would have been impossible if science hadn't laid the initial groundwork.

He has socked away very little of his earnings with which to buy a ranch.Financial usually refers to money matters or transactions of some size or importance: a financial wizard.

Fiscal is used especially in connection with government. Finance is a term for matters regarding the management, creation, and study of money, investments, and other financial instruments. financial usu. refers to money matters or transactions of some size or importance: a lucrative financial deal.

fiscal is used esp. in connection with government funds, or. Asset: An item of ownership that has exchange value. Balance: Amount available in an account.

In terms of debt, the amount owed, not including payments already made. Bankruptcy: A legal procedure where the debtor’s assets are liquidated by the court to account for financial obligations.

I’ve taken 42 financial terms that I feel are important for general personal finance and gave a brief definition of each term. Define finance. finance synonyms, finance pronunciation, finance translation, English dictionary definition of finance.

n. 1. The management of money, banking, investments, and credit. 2. finances Monetary resources: could not make the purchase because of limited finances.

Defining financial terms
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