Financial Markets, Business Structures, and Globalization Glossary

A comprehensive vocabulary flashcard set based on lecture notes covering the stock market, business structures, and globalization mechanisms.

security

A tradable financial instrument, such as a stock, bond, or option, that represents ownership or a debt agreement.

stock market

A system of markets where shares, bonds, and other securities are bought and sold.

stock exchange

A regulated marketplace where securities such as stocks and bonds are officially traded.

trading of securities

The buying and selling of financial instruments such as stocks and bonds.

derivative

A financial contract whose value is based on an underlying asset such as a stock, bond, or commodity.

bond

A fixed-income financial instrument in which an investor lends money to a company or government for a defined period, in exchange for regular interest payments and repayment of the principal at maturity.

over-the-counter (OTC) market

A decentralised market where securities are traded directly between parties, without going through a formal stock exchange.

convert to cash

To sell an asset or security in order to obtain money that can be used immediately.

equity financing

A way of raising capital by selling a company's shares to investors in exchange for ownership.

debt financing

A method of raising capital by borrowing money, usually through loans or bonds, with the obligation to repay it with interest.

ordinary share (US: common stock)

A type of share that represents direct ownership in a company, giving shareholders voting rights and the possibility of dividends.

preference share (US: preferred stock)

A type of share that gives shareholders priority over ordinary shareholders in receiving dividends and, in some cases, assets during liquidation.

dividend

A payment made to shareholders from a company's profits.

bankruptcy (go bankrupt)

The legal state of being unable to repay debts.

bid price

The price that a buyer is willing to pay for a security.

bull

An investor who believes prices will rise and buys securities expecting to sell them later at a higher price.

bullish

Behaviour or attitude of expecting prices in the market to rise.

bear

An investor who believes prices will fall and sells securities to profit from the decline.

bearish

Behaviour or attitude of expecting prices in the market to fall.

fund

An investment vehicle that pools money from many investors to buy a diversified portfolio of assets, such as stocks or bonds, managed by professionals.

artisan

A skilled craftsperson who makes goods by hand, often using traditional methods.

branch office

A location of a company that operates in a different place from its headquarters but is not a separate legal entity.

business sector

A distinct part of the economy that groups companies providing similar products or services.

cooperative

A business owned and managed by its members, who share profits and decision-making equally.

divisional structure

An organisational model in which a company is divided into semi-autonomous units based on products, markets, or geography, each responsible for its own performance.

economic downturn

A period when the economy slows, marked by falling output, rising unemployment, or reduced spending.

freelancer

A person who works independently, offering services to multiple clients rather than being employed by one company.

general partnership (GP)

A type of partnership where all partners share equal responsibility and unlimited liability.

joint venture

A business arrangement in which two or more parties agree to pool resources for a specific project or activity, sharing profits, risks, and control.

labour shortage

A situation in which there are not enough workers with the required skills to meet job demand.

limited liability company (LLC)

A legal business structure that protects owners from personal financial risk, limiting their liability to their investment.

limited partnership (LP)

A partnership with at least one partner having limited liability and not participating in management.

non-profit company

An organisation that uses its surplus revenues to achieve social, cultural, or charitable goals rather than distributing profits to owners.

partnership

A business owned by two or more people who share profits, responsibilities, and liabilities.

private company limited by shares

A company that does not trade its shares publicly, limiting ownership to a small group of investors, with liability restricted to their shares.

production plant

A large facility where goods are manufactured or assembled, often on a large scale.

public limited company (PLC)

A company whose shares are traded on a stock exchange and can be bought by the general public, with shareholder liability limited to their investment.

representative office

An office established abroad by a company for marketing, customer support, or administration, without engaging in direct business.

retail sector

The part of the economy made up of businesses that sell goods and services directly to consumers.

sole proprietorship

A business owned and run by a single individual, who has full control and bears unlimited personal liability.

state-owned enterprise (SOE)

A business owned and operated by the government, often in key industries such as energy, transportation, or defence.

subsidiary

A company controlled by another (the parent company), which holds a majority of its shares.

absolute advantage

The ability of a country, company, or individual to produce more of a good or service using the same amount of resources than others.

carbon-neutral targets

Goals set by governments or organisations to balance the amount of carbon dioxide emitted with an equivalent amount removed from the atmosphere, usually by a specific deadline.

commercial hub

A city or region that serves as a centre for trade, business, and economic activity, often connecting merchants and markets from different areas.

comparative advantage

The ability of a country, company, or individual to produce a good or service at a lower cost than others.

deforestation

The cutting down or clearing of forests, often on a large scale, usually for farming, logging, or urban development.

free trade vs. protectionism

Refers to the debate between allowing international trade with minimal restrictions (free trade) and restricting trade to protect domestic industries (protectionism).

geopolitical rivalry

Competition and tension between countries or regions based on political, economic, or strategic interests.

global supply chain

The worldwide system through which goods and services are produced, transported, and delivered, often involving multiple countries and stages of production.

infant industry

A newly established industry that is protected from international competition until it becomes competitive.

International Monetary Fund (IMF)

An international financial institution established in 1944 to promote global economic stability, provide financial assistance to countries in crisis, and support international development.

joint-stock company

A type of business organisation in which ownership is divided into shares that can be bought and sold by investors, who share profits and risks.

jurisdiction

The official power to make legal decisions and judgments in a particular area, or a country or region with its own set of laws and regulations.

labour conditions

The working environment, rights, and standards experienced by workers, including pay, safety, and hours.

mass production and consumption

The large-scale manufacture of goods combined with widespread purchasing and use of these goods by the general public.

merchant

A person or company involved in the buying and selling of goods, especially in large quantities or international trade.

multinational corporation (MNC)

Large companies that operate in multiple countries, managing factories, offices, and markets beyond their home nation.

NAFTA (North American Free Trade Agreement)

A trade agreement signed in 1993 between the United States, Canada, and Mexico that removed trade barriers and created one of the world's largest free trade zones.

offshore

Relating to business activities, especially banking or company registration, taking place outside a company's home country, usually in order to reduce taxes or regulations.

Paris Climate Accord

An international treaty adopted in 2015 aimed at limiting global warming to well below $2\,^{\circ}\text{C}$ above pre-industrial levels, with efforts to limit it to $1.5\,^{\circ}\text{C}$.

precious stone

A valuable gemstone, such as a diamond, ruby, emerald, or sapphire, often used in jewellery.

quota

A government-imposed limit on the quantity of a good that can be imported or exported during a specific period.

resource depletion

The gradual using up or exhaustion of natural resources such as minerals, fossil fuels, or water, due to overconsumption or exploitation.

subsidy

Financial assistance provided by a government to support businesses or industries, usually to keep prices low or competitive.

tariff

A tax imposed on imported goods and services.

trade liberalisation

The process of reducing or removing barriers to international trade, such as tariffs, quotas, and restrictions, to allow goods and services to move more freely across borders.

trade route

A pathway or network used by traders and merchants to transport goods and conduct commerce between regions.

wealth

An abundance of valuable resources or possessions at one's disposal, particularly money, land, or goods.

WTO (World Trade Organization)

An international organisation established in 1995 that regulates global trade, resolves disputes, and promotes free trade among nations.