Finance is a subject that encompasses many aspects of life. Whether you studied finance in college or not, the issue of finance will still affect you. In this article, you will find the various financial terms and their meanings.
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 52-week high/low is the other financial term which you should know. 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.
A back-end load is also among the critical financial terms in the world of finance. it is simply a sales charge which an investor pays the moment they sell shares in a mutual fund.
You should also be knowledgeable about what a balance sheet is because it is used a lot in finance. If you hear the term balance sheet, know that it is basically a statement which lays bare the belongings of the company as well as that which it owes outsiders and shareholders.
The balanced fund is another term that is frequently used in finance. The mutual fund that has both equities and bonds is what is called a balanced fund.
you should also be able to know what someone means when they talk of a bear market. 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.
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 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.
The other term that is frequently used in finance is the cost of capital. Cost of capital in simple terms is the amount of money required to make a capital budgeting project effective.
The other thing whose meaning you should understand is the cost of equity. Cost of equity refers to the returns that a company anticipates receiving from the equity financing they receive.