Finance

Finance studies and addresses the ways in which individuals, businesses and organizations raise, allocate and use monetary resources over time, taking into account the risks entailed in their projects. The term finance may thus incorporate any of the following:

Financial economics

Main article Financial economics

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Financial Economics is the branch of Economics studying the interrelation of financial variables, s.a. prices, interest rates and shares as opposed to those concerning the real economy.

Related Topics:
Economics - Variables - Price - Interest rate - Shares

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Financial economics concentrates on influences of real economic variables on financial ones, in contrast to pure finance.

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It studies:

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• Valuation - Determination of the fair value of an asset
• How risky is the asset? (identification of the asset appropriate discount rate)
• What cash flows will it produce? (discounting of relevant cash flows)
• How does the market price compare to similar assets? (relative valuation)
• Are the cash flows dependent on some other asset or event? (derivatives, contingent claim valuation)
• Financial markets and instruments
• Commodities - topics
• Stocks - topics
• Bonds - topics
• Money market instruments- topics
• Derivative securities- topics
• Financial institutions and regulation