Definitions

FIN/370 Version 8

University of Phoenix Material

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

a dollar received today, other things being the

same, is worth more than a dollar received a year
from now

Titman, Keown & Martin,

2013, p.127

Efficient market

a strategy of shifting ones portfolio in response to

public information

Titman, Keown & Martin,

2013, P. 210

Primary versus
secondary market

Primary market: where new security issues are

initially bought and sold

Titman, Keown & Martin,

2013, . 36

Secondary market: where previously issued

securities such as stocks and bonds are bought
and sold
Risk-return tradeoff

with more risk resulting in a higher required rate of

return

Titman, Keown & Martin,

2013, P. 328

Agency principal
and agent problems

The conflict of interest between the firms

managers and its stockholders.

Titman, Keown & Martin,

2013, p. 13

Market information
and security prices
and information
asymmetry

Market information: Market Prices Reflect

Information. Investors respond to new information
by buying and selling such that prices reflect what
is known.

Titman, Keown & Martin,

2013, p. 17

Security prices: Price for A negotiable instrument

that represents a financial claim that has value.
Information asymmetry: A situation in which one
party in a transaction has more or superior
information compared to another.

Titman, Keown & Martin,

2013, p. 36
http://www.investopedia.c
om/terms/a/asymmetricinf
ormation.asp

Agile and lean

principles

Fundamental principles
1. Focus on customer success
2. Create a mutually advantageous and
trused environment for all stakeholders
3. Institutionalize continuous improvement
4. Close the loop between planning and
execution

http://www.apics.org/indu
stry-contentresearch/publications/api
cs-magazine/apicsmagazine---landingpage--everyone/2013/09/20/lea
n-and-agile

Return on
investment

performance measure used to evaluate the

efficiency of an investment or to compare the
efficiency of a number of different investments

http://www.investopedia.c
om/terms/r/returnoninvest
ment.asp

Cash flow and a

source of value

Cash flow is the amount of cash that can actually

be taken out of the business over this same

Titman, Keown & Martin,

2013, p.12

Copyright 2014 by University of Phoenix. All rights reserved.

Definitions
FIN/370 Version 8
interval.
Project
management

The planning and organization of an organization's

resources in order to move a pecific task, event or
duty toward completion.

http://www.investopedia.c
om/terms/p/projectmanagement.asp

Outsourcing and
offshoring

Outsourcing: reduce costs by transferring portions

of work to outside suppliers

http://www.investopedia.c
om/terms/o/outsourcing.a
sp

Offshoring: the practice of moving employees or

certain business activities to foreign countries

http://dictionary.reference.
com/browse/offshoring

Inventory turnover

indicate the efficient use of the firms investment in

inventories

Titman, Keown & Martin,

2013, p. 413

Just-in-time
inventory JIT

An inventory strategy to increase efficiency and

decrease waste by receiving goods only as they
are needed in the production process

http://www.investopedia.c
om/terms/j/jit.asp

Vender managed
inventory VMI

Inventory replenishment arrangement whereby the

supplier either monitors the customer's inventory
with own employees or receives stock information
from the customer. The vendor then refills the
stock automatically, without the customer initiating
purchase orders.

http://www.businessdictio
nary.com/definition/vendo
r-managed-inventoryVMI.html

Forecasting and
demand
management

Demand Management: recognizing all demand for

goods and services to support the marketplace.

http://www.apics.org/indu
stry-contentresearch/publications/om
bok/apics-ombokframework-table-ofcontents/apics-ombokframework-5.4

Forecasting: attempting to predict or project future

statistics

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