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The following terminologies will help you to have a basic Idea about several Finance Terms which are Used widely by the Industry. Today onwards I am going to give you the meaning of 5 finance Jargons which are used widely in the market. Happy readings.

1. Arbitrage:

The Economics Glossary defines arbitrage opportunity as "the opportunity to buy an asset at a low price then immediately selling it on a different market for a higher price."

2. Bear market:

A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining

3. Beta:

A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), a model that calculates the expected return of an asset based on its beta and expected market returns.

4. Bond:

The indebted entity (issuer) issues a bond that states the interest rate (coupon) that will be paid and when the loaned funds (bond principal) are to be returned (maturity date)

5. Bonus shares:

Free shares of stock given to current shareholders, based upon the number of shares that a shareholder owns. While this stock action increases the number of shares owned, it does not increase the total value. This is due to the fact that since the total number of shares increases, the ratio of number of shares held to number of shares outstanding remains constant.

RAVI BHANDARI
Lecturer,AIMS,PUNE.