equity 

assets : something valuable that a company owns and controls and you can sell and change it for
cash (ex: house)  it has a value

account receivable

accounts payable

Inventory: (ex: product that retailers sell to customer)

debts

 liabilities OWE something you have to pay back in the future (ex: loan)

loan is a liability

stocks

shares

common shares

shareholders

shareholder’s equity

retained earnings

dividends: at the end of the year if the company(s revenues exceed the expenses (we earned more
than what we spent) we are profitable and if we’re profitable we can

keep the money (profits) in the company

or the shareholders can say I’d like some of that money, I’m going to take a dividend  shareholders
pulling profits from the company (taking from retained earnings)

funds

Mortgage: is an agreement between you and a lender that gives the lender the right to
take your property if you fail to repay the money you've borrowed plus interest

Revenues  earn
Expenses  costs

Mutual funds
Hedge funds
KEY TAKEAWAYS

 Financial markets refer broadly to any marketplace where the trading

of securities occurs.
 There are many kinds of financial markets, including (but not limited
to) forex, money, stock, and bond markets.
 These markets may include assets or securities that are either listed
on regulated exchanges or else trade over-the-counter (OTC).
 Financial markets trade in all types of securities and are critical to the
smooth operation of a capitalist society.
 When financial markets fail, economic disruption including recession
and unemployment can result.

What Is a Fund?
A fund is a pool of money that is allocated for a specific purpose. A fund
can be established for many different purposes: a city government setting
aside money to build a new civic center, a college setting aside money to
award a scholarship, or an insurance company that sets aside money to
pay its customers’ claims.

 Mutual funds are investment funds managed by professional

managers who allocate the funds received from individual investors
into stocks, bonds, and/or other assets.
  Money-market funds are highly liquid mutual funds purchased to
earn interest for investors through short-term interest-bearing
securities, such as Treasury bills and commercial paper.
 Exchange-traded funds (ETFs) are similar to mutual funds but are
traded on public exchanges (similar to stocks).
 Hedge funds are investment vehicles for high-net-worth individuals
or institutions designed to increase the return on investors’ pooled
funds by incorporating high-risk strategies such as short selling,
derivatives, and leverage.

Class exercise: what is the return for a $1,000-face-value coupon bond

with a coupon rate of 10% that is bought for $1,000, held for one year, and
then sold for $1,200?
  Government bond funds are for investors looking to put their
money away in low-risk investments through Treasury securities—
such as Treasury bonds—or agency-issued debt—such as securities
issued by Fannie Mae. Both alternatives are backed by the U.S.
government.

A security, in a financial context, is a certificate or other financial instrument

that has monetary value and can be traded.  

Securities are generally classified as either equity securities, such as stocks

and debt securities, such as bonds and debentures. The sale of securities
to investors is one of the primary ways that publicly-traded companies  drive
new capital for operations.
Bonds are used by companies, municipalities, states, and sovereign
governments to finance projects and operations. Owners of bonds are
debtholders, or creditors, of the issuer.
What Is the Stock Market?
The term stock market refers to several exchanges in which shares of
publicly held companies are bought and sold. Such financial activities are
conducted through formal exchanges and via over-the-counter (OTC)
marketplaces that operate under a defined set of regulations.