Definitions
Define the following terms using your text or other resources. Cite all resources consistent with APA guidelines.
Term Definition Resource you used
Time value of money The idea that money available at the present time is worth more than the same amount in the future because of its potential earning capacity. Investopedia. (2014). Retrieved from: http://www.investopedia.com/terms/t/timevalueofmoney.asp
Efficient market An efficient market is one in which all pertinent information is readily available to all participants simultaneously. In an efficient market prices respond immediately to available information. A stock market is an example of an efficient market. Keown, A.J., Martin, J.D., Petty, J.W., & Scott, D.F., (2005), Financial Management: Principles and applications (10th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall.
Primary versus secondary market In a primary market, buyers and sellers transact business directly. There are no resellets in a primary market.
In a secondary market, previously owned securities are bought and sold. Stock exchanges and over the counter markets are examples of secondary markets. Keown, A.J., Martin, J.D., Petty, J.W., & Scott, D.F., (2005), Financial Management: Principles and applications (10th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall.
Risk-return tradeoff Risk is the ambiguily accompanying an investment, and quantifiable odd of loss or less than expected gains Risk gauges the prospective for inferior than expected and beter than expected returns. Risks are assessed to determine if an investment is expected to make the owner a profit or if the investment could create a loss. Keown, A.J., Martin, J.D., Petty, J.W., & Scott, D.F., (2005), Financial Management: Principles and applications (10th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall.
Agency (principal and agent problems) Conflicts of interest and moral hazard issues that arise when a principal hires an agent to...