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Essay / Research Paper Abstract
This 3-page paper discusses various financial terms. Bibliography lists 5 sources.
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3 pages (~225 words per page)
File: AS43_MTdefifina.doc
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Unformatted sample text from the term paper:
economics concerned with resource allocation as well as resource management, acquisition and investment" (Finance, 2010). Furthermore, finance is involved with matters involving money/liquidity and the markets (Finance, 2010).
Efficient markets, also known as the efficient market hypothesis or efficient market theory, point out that its impossible to beat the stock market because
market prices are determined by all relevant information. In other words, in efficient markets, stocks always trade at their fair value, so trying to find undervalued stocks are all but
impossible. Primary and secondary markets are ways in which securities are traded and investors can buy securities, stocks and bonds. The primary market
is one that issues new securities on an exchange, and are facilitated by underwriting groups (i.e., investment bankers) (Primary Market, 2010). Primary markets are those in which investors can get
first dibs on a new security issue. Once the initial sale is completed, further trading takes place in the secondary markets (which is where the bulk of exchange trading takes
place through mediums such as the New York Stock Exchange) (Primary Market, 2010). The main definition of risk is the measurable likelihood
of an investors loss or less-than-anticipated returns based on a particular investment. High-risk securities tend to yield more rate of return. That investor will put his or her money into
securities, stocks or bonds. A security is a negotiable instrument that represents a financial value, and are typically categorized into debt securities (bonds) and equity securities (stocks and derivatives). Bonds
are securities in which the issuer owes the bond holders a particular debt, and is required to pay the interest and principle. Debt fits into what a bond is, as
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