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Three main areas of Finance
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sunandaC
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Three main areas of Finance - September 13th, 2010

Three main areas of Finance

Financial Markets and Institutions

Investments

Financial Management (Managerial Finance)



Financial Marketsand Institutions

Money markets provide companies and governments with short-term liquidity (raise cash to pay bills).

Capital markets provide companies and governments with long-term financing (“capital”).

Typical financial institutions involved: banks, investment banks, stock brokerages, mutual funds, pension funds, S&Ls, insurance companies

Levels of interest rates and changes in interest rates are of great importance.

Investments
Sale of stocks and bonds

Security analysis

Advising

Portfolio Management

Financial Management

Financial management is the study and practice of making dollar denominated decisions within a single firm. Most people in finance work in financial management.

Functions

Acquisition of funds:
 short-term financing: bank loans, etc. (liabilities)
 long-term financing: stocks (equity) & bonds (debt)

Allocation (uses) of funds:
 short-term: working capital management
 long-term: capital (stocks & bonds) management

Responsibilities
 forecasting and planning
 investment and financing decisions
 coordination and control as member of management team
 interaction with financial markets
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Last edited by bhautik.kawa; August 25th, 2015 at 09:30 PM..
   
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