Economics & Finance
WHAT IS FINANCE AND WHAT CAN YOU DO WITH
A DEGREE IN FINANCE?
Finance is broadly defined as the
art and science of making decisions involving money in a variety of
contexts. Finance is studied
so that people can allocate their scarce resources over time under
conditions of uncertainty. By
doing so, individuals utilize the financial system (i.e., financial
markets & institutions) as well as economic organizations (i.e.,
corporations & governments) as facilitators to satisfy the ultimate
function, individual’s consumption preferences, including all the basic
necessities of life.
Not only is finance exciting and
challenging, it continues to evolve at a dizzying pace.
The field of Finance has
evolved in four interrelated areas:
(1) Financial Management (Corporate
Finance), which involves decision making about the financial management of
a firm on topics such as decisions regarding plant expansions, choice of
securities to use to finance future acquisitions, evaluating
merger/acquisition opportunities etc.
Essentially, Financial Management deals with the acquisition and
use of funds to maximize the value of the firm.
(2) Financial Markets and
Institutions, which focuses on an understanding of the markets in which
finance professionals and investors operate.
This involves the study of the level and structure of interest
rates and various types of financial instruments, different financial
institutions and their regulatory environment, the structure and
regulation of financial markets etc.
(3) Investments, which
involves an understanding of various investment options and asset
allocation decisions, evaluation of various securities, assessment of
appropriate risk-return tradeoffs, and construction and management of
efficient portfolios etc.
(4) Financial Planning, which
involves evaluating financial goals and developing comprehensive financial
plans for individuals in a highly complex and regulated environment.
With changes in the demographic characteristics of the US
population, and shifts in employment and retirement preparation trends,
more and more people find themselves in a position of need to apply
sophisticated financial planning techniques to their personal economic
affairs, such as college savings plans, retirement plans, estate planning,
insurance needs assessment etc.
With a good educational
training in Finance, you can seek career opportunities, either
domestically or internationally, in the following areas:
·
Corporate Finance, typically within the treasury function of
corporations, including working
capital management, forecasting and
planning, budgeting, etc.
·
Corporate Real Estate, Insurance and Miscellaneous
·
Financial Services including banking, trust, insurance,
securities, etc
·
Portfolio Management
·
Investment Banking
·
Investment advisory services
·
Financial planning
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