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Definitions Of Various Financial Terms

Most of the things in life involve finance. Finance is not just to be understood by those in business and in the corporate world, but by every one who deals with finances even if they are simply personal like pocket money that is given to students by parents and guardians. The following is a financial terms glossary.

The 12b-1 fee is a fee that a mutual fund charges which covers the cost of marketing and distribution and also some service fees.

You may also encounter the term know as the 52-week high/low. It is basically the top most closing price and the least closing price for which the stock trades through a 52-week period.

You also ought to know about asset allocation. Asset allocation is basically an investment strategy for controlling risk and return through adjusting the fraction of every single asset in the distinctive groups of assets.

The other financial term you may face is the back-end load. This is the amount of commission which is paid by an investor for selling shares in a mutual fund.
The balance sheet is the other one of common finance terms. A balance sheet is a financial statement which spells out the assets, the liabilities and the owners’ equity that the company holds.

The other term which you should know in finance is the balanced fund. This simply refers to a mutual fund type that has both equities and bonds.

you should also be able to know what someone means when they talk of a bear market. What a bear market refers to is a market that makes a downward trend in its growth by 20 percent or greater over at least two months’ time frame.

It is also possible that you do not know what a candle stick is in financial terms. 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 inflow and cash outflow is what makes up cash flow. The difference between cash in-flow and cash-outflow is the direction the cash and cash equivalents move.

The other financial term that you need to know is the cost of capital. The total money needed to make a capital budgeting project fruitful is what is known as the cost of capital.

Cost of equity is also another commonly used financial term. Cost of equity, in general, is the total returns expected from particular equity financing a company receives.

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