Most of the things in life involve finance. Whether you studied finance in college or not, the issue of finance will still affect you. This article explains the meaning of different financial terms that you will come across at some point in life.
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.
The other term that you may come across is the 52-week high/low. This term simply points out the closing price that was the most and also that which was the least within a 52 week period of trading.
The term asset allocation another one among the many financial terms. 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.
A balance sheet is also a common term in finance. A balance sheet is a statement that shows the financial position of a company by accounting for the things which belong to the company, as well as what the company owes shareholders and other stakeholders like creditors.
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 also ought to know what a bear market is. A market that down trends by 20% or even more through at least a 2 months’ timespan is a bear market.
You may also be clueless of what a candlestick is in the finance world. A candlestick is in simple terms a technical indicator that helps traders to know the opening and closing stock price for a certain period.
the other frequently used term in finance is cash flow. cash flow can be either cash in-flow or Cash out-flow. Cash in-flow is simply the amount of cash and cash equivalents being given into a firm and cash out-flow is the amount of cash and cash equivalents that are given out from a company.
The other financial term that you need to know 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. When someone talks of cost of equity, they simply mean the amount of returns they look to get from equity financing which they receive.