Component 1 - Financial Management

1. The market where previously issued securities are traded among investors.
3. The first time a company offers its shares to the public.
5. The process of raising capital for business activities.
8. The discount rate at which the net present value of a project becomes zero.
10. The system of rules, practices, and processes that direct and control a company.
12. The market where new securities are issued and sold for the first time.
13. Spreadsheet software commonly used to calculate financial values using formulas.
14. Value of an investment at a future date given a specified rate of return.
16. The market for short-term financial instruments like Treasury bills and commercial paper.
17. A series of equal payments made at regular intervals.
18. The act of committing money to an asset with the expectation of future returns.
19. Ratio of present value of cash inflows to the initial investment.

2. A financial market for long-term investment securities such as stocks and bonds.
4. The time required to recover the initial investment in a project.
6. A short-term government security with a maturity of less than one year.
7. Short-term borrowing for a period ranging from 2 to 14 days.
9. Present value of a future sum discounted at the appropriate rate.
11. The difference between present value of cash inflows and outflows of a project.
15. A portion of a company’s earnings distributed to shareholders.
17. A capital budgeting method that evaluates profitability based on accounting income.