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100
Any resource with value that is held by a company, individual or country. It add to value and are bought either to increase value or to benefit the firm.
What is an asset
100
A financial institution which receives customer deposits. Due to the fact that they have control over the money of the general population, they are usually highly regulated by the government.
What is a bank?
100
A vague term which can refer to one of two things: -Factories, machinery, equipment etc. owned by a company -The value of financial assets such as cash, short-term securities etc.
What is capital?
100
Any money borrowed from a 3rd party that has to be paid back. Companies will typically use this either as a cheap means of funding, or to fund purchases would otherwise be unaffordable to them.
What is debt?
100
In finance there are two main meanings: -A share or any other security which represents partial ownership of a firm -The value of a firm which has been contributed by the shareholders
What is equity?
200
An assessment of the financial statements issued by a firm to verify their accuracy and thoroughness through a process of due diligence. It's almost always carried out by an external firm due to the conflict of interest of a firm auditing its own finances.
What is Audit
200
An intermediary who performs orders on behalf of a client, and takes a fee for doing so (regardless of whether the trade is profitable or not). They usually have fixed trade commissions.
What is a Broker?
200
Highest-ranking officer whose responsibilities includes: Monitoring cash flow Financial planning Money management
What is a Chief Financial Officer?
200
When any asset is deemed to have reduced in value. No tangible asset can last indefinitely and therefore at some point, the asset will no longer be usable and will have to be recorded as a loss on the income statement.
What is depreciation?
200
A derivatives market based in Europe, and is the largest derivatives market in the world. It focuses mainly on European futures and derivatives.
What is Eurex?
300
An action by a corporation to assume control of a target firm. This is done by buying either all or most of the target’s ownership stakes.
What is Acquisition
300
a type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
What is a bitcoin?
300
Any good that is identical (or very similar) from any producer, i.e. producers have to compete on price. They are usually used in production of other goods or services. The most common types traded on financial markets are: Oil Wheat Copper Iron
What is a commodity?
300
A payment by a company to its shareholders representing a portion of earnings. The board of directors of the firm determines the amount paid. Usually quoted in ammount per share.
What is dividend?
300
One of the most commonly used indicators of the profitability of a firm. The calculation is Operating Income + Depreciation + Amoritzation + Stock-Based Compensation.
What is EBITDA?
400
A product that is sold by financial institutions to investors. The investors pay in a certain amount of money over a period of time, and then at a given time it starts to pay out money to the investor for a given period of time.
What is Annuity
400
A corporate action undertaken by a firm where it repurchases some of its shares outstanding from the market. This is done for one of 3 reasons: -Increase the value of the shares (less supply, same demand = higher price). -Invest in themselves; owning more shares in the company allows them to experience a higher percentage of the profits. -Reduce the threat of any takeover by reducing the percentage of the company which is up for sale on the markets.
What is a buyback
400
Any asset which is used as backing for debt. In the event of a default on the debt, it is seized to cover the losses.
What is collateral?
400
The technical definition of when any borrower fails to make a payment on their debt. This can be failure to pay interest or principal, and can be any amount.
what is default?
400
A metric that attempts to reflect the market value of a firm. It can be used as an alternative to market capitalization. (2 words)
What is Enterprise Value?
500
The reduction of a debt or asset over a specific period of time.
What is Amortization?
500
A trading term used to refer to a situation where the price of a future for a specific asset is lower than the expected spot price at the time of expiration of the future. For example, if it is currently March 2012 and the price of a Dec12 oil future is $120 whereas the expected spot price for Dec12 is $125, this occurs.
What is backwardation?
500
A trading term used to refer to a situation where the price of a future for a specific asset is higher than the expected spot price at the time of the expiration of the future. For example, if it is currently January 2012 and the price of a Sept12 gold future is $1800 but the expected price of gold in September 2012 is only $1700, this occurs.
What is contango?
500
The act of investigating any potential investment, usually through an auditor or an audit process. It is essential to any financial process, and the purpose of it is to ensure that all facts presented (financial statements, solvency, management structure etc.) are accurate and true. (clue: might be more than one word)
What is due diligence?
500
The application of statistical and mathematical theories to economics for the purpose of testing hypotheses and forecasting future trends. It takes economic models and tests them through statistical trials. The results are then compared and contrasted against real-life examples.
What is econometrics?