Finance is an aspect that affects a huge percentage of the tings you do in life. You need to understand finance because whether you are an investor or not you have to come across things to do with finance. The following is a financial terms glossary.
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 will also meet the term asset allocation. Asset allocation is simply a strategy of investment where the percentage of individual assets among different asset classes is modified for the purpose of regulating risk and reward.
You also ought to know the meaning of 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 balanced fund is another term that is frequently used in finance. 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. A market that down trends by 20% or even more through at least a 2 months’ timespan is a bear market.
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.
You should also know what cash flow means because it is used very much in finance. Cash flow is usually further categorized into cash inflow and cash outflow. 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.
Cost of capital is also a financial term that you will come across in your interaction with finance. 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.