Finance is an umbrella term for many things regarding the study, development, management, and investing of money and other financial assets. It is a systematic approach to analyzing the costs of managing money, both immediate and future, as well as the efficiency with which various fiscal instruments are used. Financial management is typically an objective study that covers the whole of a firm’s activities in the economic, social, and political arenas.
Today, Finance is governed by the major areas of policy, programs, organizations, public policies, and practices. Policy, program, and organization involve the macro-policy frameworks affecting the development of the financial markets. Public policies affect private decisions made in the financial markets. Programs, on the other hand, are those that are designed for the improvement of the overall performance of the financial services sector.
The main article below is organized to help readers become more acquainted with the theory and practice of finance. The main article includes topics such as: macro-pricing, risk management, non-financial pricing, asset allocation, asset pricing, financial economics, capital budgeting, financial risk, economic growth, price inflation, business cycles, balance of payments, central banking, international trade, government finance, monetary system, public finance, and bank banking. As always, the above list is not exhaustive.
The main article begins with an explanation of the major concepts behind the field of economics. The main concepts include macroeconomics, microeconomics, risk, economic growth, efficiency, consumption, investment, and wealth. The first topic is risk and how it affects the production, saving, investment, distribution, and consumption of wealth. The second topic is economic growth and its effect on the level of macro economic indicators. Consumption, investment, and savings are the next topics in the main article.
An introduction to savings and investment banking is then given. An introduction to the individual investor’s view of and relationship with the banking industry, and finally the topics that were mentioned in the introduction are touched on. An interesting part of the article is the use of bank statements and other financial records to aid the analysis of finance. The ability to compare financial statements from various banks is also touched on.
A glossary of financial terms is included as well as a glossary of industry terms for further reading convenience. The fourth section explains the differences between fiscal, non-financial, and credit risk. Balancing the books is also touched on in the discussion of finance risk. A glossary of financial terms is also included as well as explanations for why it would be beneficial to use particular terms in a financial transaction. The fifth and final section of the book provides a brief review of current research areas and a brief analysis of the book conclusion.
Finance can be taught in many ways. Many schools now offer a variety of degree programs that include a strong emphasis on finance. Students who choose to specialize in investment banking may decide to teach finance as part of their course program. Whatever the chosen specialization, there are currently three main areas of finance to choose from.
Private Finance: this is the more general term that encompasses investment banking, mergers and acquisitions, owner financing, and corporate finance. Hedge Funds: These are actually investments in options that involve risks of price decreases or increases. Another type of finance is Futures Trading, which deals with contracts for holding the stocks or commodities for a specific period of time, at pre-set prices. Finally, another area of focus in finance is Private Placement and Real Estate Financing. Within these categories, however, the scope of the field is nearly endless.
Investing largely in financial markets and the performance of financial institutions, banking, investing, and corporate finance are all important parts of finance. Banking refers to the business of lending money and the borrowing of money by commercial borrowers. Borrowing refers to the transactions involving the lending and repayments of money. This includes everything from savings accounts to loans to credit cards and other types of credit. In addition, banking is an area of study that often leads to other related fields such as economics or actuarial science.
Those looking to obtain finance jobs should consider all of the various degree programs available. There are many accredited programs at four-year universities and colleges nationwide. At two-year institutions, students can pursue a bachelor’s degree in business, accounting, or computer science, or a bachelor of arts in business, accounting, or computer science. Students also have the option of attending an online school for one of these higher level degrees.
One must not forget that the field of finance may also encompass investments, as well as derivatives, which are financial products such as stock bonds, foreign currency bonds, commodity bonds, and bank bonds. There are also special interest groups within this field such as credit risk, asset quality, credit spread, economic environment, and idiosyncratic risk. Within the United States, there are currently eight main agencies that are responsible for providing financial advice to government and private sector employers on matters ranging from employee retirement plans to worker compensation. These agencies are the U.S. Department of the Treasury, the Federal Reserve, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, the National Association of Insurance Commissioners, and the Federal Reserve Board.