Financial dictionary

Financial leverage is a strategy that uses borrowed capital (debt) to increase the potential return on an investment. It involves using loans or other forms of financing to increase the volume of investments that an investor can manage. This approach can significantly amplify profits if the investment generates a positive return. However, financial leverage can also increase the risk of loss, as it can lead to higher losses if the investment does not meet expectations. Therefore, it is important to carefully consider the potential benefits and risks before using financial leverage.

A financial market is a place where investors and issuers of financial instruments meet to trade various assets. This market facilitates the trading of stocks, bonds, commodities, currencies, and other financial products. Financial markets can be divided into capital markets, where stocks and bonds are traded, and money markets, where short-term securities and liquid assets are traded. The financial market plays a key role in the economy by enabling capital allocation, setting asset prices, and ensuring liquidity, which contributes to the efficient functioning of the economy.

A fund manager is a professional responsible for managing and overseeing an investment fund. Their role is to make decisions regarding the fund's investment strategy, select specific investments, and monitor their performance to achieve the fund's established investment goals. The fund manager analyzes markets, assesses risks, and constructs a portfolio that aligns with the fund's objectives and strategy. Their decisions directly influence the fund's performance and can have a direct impact on the investors' returns.