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Definitions

FIN/370
April 6, 2015
Cindy Bayer

Definitions

Define the following terms using your text or other resources. Cite all resources consistent with APA guidelines.

Term | Definition | Resource you used | Time value of money | A dollar received today is more valuable than a dollar received one year from now. | Titman, S., Keown, A. J., & Martin, J. D. (2014). Financial management: Principles and applications (12th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall. | 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. | Titman, S., Keown, A. J., & Martin, J. D. (2014). Financial management: Principles and applications (12th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall. | Primary versus secondary market | Primary market is a market in which new, as opposed to previously issued, securities are bought and sold for the first time. Secondary market is where all subsequent trading of previously issued securities takes place. | Titman, S., Keown, A. J., & Martin, J. D. (2014). Financial management: Principles and applications (12th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall.Titman, S., Keown, A. J., & Martin, J. D. (2014). Financial management: Principles and applications (12th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall. | Risk-return tradeoff | Not taking on additional risk unless we expect to be compensated with additional returns. | Titman, S., Keown, A. J., & Martin, J. D. (2014). Financial management: Principles and applications (12th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall. | Agency (principal and agent problems) | The conflict of interest between the firm’s managers and its stockholders. | Titman, S., Keown, A. J., & Martin, J. D. (2014).

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