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
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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