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Definitions Of Various Financial Terms

Most of the things in life involve finance. Whether you studied finance in college or not, the issue of finance will still affect you. The following is a financial terms glossary.

When you are required to pay a fee by a mutual fund to cover some service fee, and the cost of marketing and distribution, the fee is known as the 12-b 1 fee.

The other term that you may come across is the 52-week high/low. This term simply points out the closing price that was the most and also that which was the least within a 52 week period of trading.

The term asset allocation another one among the many financial terms. This term refers to an investment strategy which aims to balance risk and reward through adjusting the ratio of each asset among various classes of assets.

A back-end load is also among the critical financial terms in the world of finance. If you are an investor and you sell shares in a mutual fund, you get to pay a sales charge that is the back-end load.
The balance sheet is the other one of common finance terms. A balance sheet is a statement that shows the financial position of a company by accounting for the things which belong to the company, as well as what the company owes shareholders and other stakeholders like creditors.

The other term which you should know in finance is the balanced fund. A balanced fund is a type of mutual fund that contains a mixture of equities and bonds.

You also ought to know what a bear market is. This term is usually used to refer to a market that falls by twenty percent or more over at least a period of two months.

A candlestick is also the other financial term that most people do not know. A candlestick is in simple terms a technical indicator that helps traders to know the opening and closing stock price for a certain period.

Cash flow is also a financial term that is very common in finance. cash flow can be either cash in-flow or Cash out-flow. Cash inflow is the amount of cash and cash equivalents that a company receives while cash outflow is the sum of cash and cash equivalents a company issues outside of the company.

Cost of capital is also a financial term that you will come across in your interaction with finance. The total money needed to make a capital budgeting project fruitful is what is known as the cost of capital.

You also should know what cost of equity is as it is usually common in finance. When someone talks of cost of equity, they simply mean the amount of returns they look to get from equity financing which they receive.

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