Introduction to Finance

Aggregate demand
Total demand for fi nal 
goods and services in the economy at a point 
in time
American depository receipt (ADR)
Re-
ceipt that repre 
sents foreign shares to U.S. 
Investors
Amortized loan
A loan repaid in equal pay-
ments over a specifi ed time period
Annual percentage rate (APR)
Determined 
by multip 
lying the interest rate charged per 
period by the number of periods in a year
Annual report
Contains descriptive infor-
mation on operating and fi nancial performance 
during the past year, a discussion of current 
and future business opportunities, and fi nancial 
statements that provide a numerical record of 
fi nancial performance
Annuity
A series of equal payments (receipts) 
that occur over a number of time periods
Annuity due
Exists when equal periodic 
payments start at time period zero or, in other 
words, the beginning of each time period
Arbitrage
The simultaneous, or nearly simul-
taneous, purchasing of commodities, securities, 
or bills of exchange in one market and selling 
them in another where the price is higher
Ask
Price requested by the seller
Asset-based lending
Collateral or security 
backing the loan that can be claimed or sold by 
the lender if the borrower defaults
Asset management ratios
Indicate 
extent 
to which assets are turned over or used to 
support sales
Assets
Financial and physical items owned 
by a business
At-the-money
Exercise price equals the mar-
ket price of the underlying asset
Automatic stabilizers
Federal government 
programs that act on a continuing basis to 
stabilize disposable income and economic 
activity in general