"Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, which is the study of production, distribution, and consumption of money, assets, goods and services..."
This deals with financial markets and institutions, including banks, credit, and insurance. It explai s how financial decisions can impact the economy and how monetary policy can influence the stock market.
Financial Statements: Understanding financial statements is fundamental to personal and business financial management. This topic includes an understanding of the balance sheet, income statement, and statement of cash flows.
Accounting Principles: Accounting principles encompass the key concepts, standards, and rules that guide financial accounting. This topic includes an understanding of GAAP, IFRS, and other accounting standards.
Investment Principles: Investment principles include an understanding of risk and return, asset allocation, diversification, and various investment strategies such as value investing and growth investing.
Financial Markets: Understanding financial markets involves learning about the various types of markets including stock, bond, and derivative markets, as well as exploring the role of the Federal Reserve, central banks, and other financial institutions.
Corporate Finance: Corporate finance covers the financial decisions a company makes, including capital budgeting, financing decisions, and dividend policy. This topic also includes an understanding of financial statement analysis, ratio analysis, and other tools used to evaluate the financial health of a business.
Personal Finance: Personal finance covers the fundamental principles of managing personal finances, including budgeting, debt management, retirement planning, and investing.
Financial Modeling: Financial modeling involves building mathematical models to help make financial decisions. This topic includes an understanding of Excel and other financial modeling tools, as well as concepts like forecasting and scenario analysis.
Risk Management: Risk management involves identifying and managing risks that could negatively impact financial outcomes. This topic includes an understanding of insurance, hedging, and other strategies for managing risk.
Economics: Economics is the study of how people and societies allocate scarce resources. Understanding economics is important for finance professionals to make informed decisions about investments, risk management, and financial forecasts.
"Finance activities take place in financial systems at various scopes; thus, the field can be roughly divided into personal, corporate, and public finance."
"In a financial system, assets are bought, sold, or traded as financial instruments, such as currencies, loans, bonds, shares, stocks, options, futures, etc..."
"Assets can also be banked, invested, and insured to maximize value and minimize loss."
"In practice, risks are always present in any financial action and entities."
"A broad range of subfields within finance exists due to its wide scope. Asset, money, risk and investment management aim to maximize value and minimize volatility."
"Financial analysis is the viability, stability, and profitability assessment of an action or entity."
"In some cases, theories in finance can be tested using the scientific method, covered by experimental finance."
"Some fields are multidisciplinary, such as mathematical finance, financial law, financial economics, financial engineering, and financial technology."
"Ancient and medieval civilizations incorporated basic functions of finance, such as banking, trading, and accounting, into their economies."
"In the late 19th century, the global financial system was formed."
"In the middle of the 20th century, finance emerged as a distinct academic discipline, separate from economics."
"The first academic journal, The Journal of Finance, began publication in 1946."
"The earliest doctoral programs in finance were established in the 1960s and 1970s."
"Finance is today also widely studied through career-focused undergraduate and master's level programs."