Finance

AAA

DEFINITION of 'Finance'

The science that describes the management, creation and study of money, banking, credit, investments, assets and liabilities. Finance consists of financial systems, which include the public, private and government spaces, and the study of finance and financial instruments, which can relate to countless assets and liabilities. Some prefer to divide finance into three distinct categories: public finance, corporate finance and personal finance. All three of which would contain many sub-categories.

INVESTOPEDIA EXPLAINS 'Finance'

The study of finance can also take many forms, depending on the field or area of finance which one wishes to study. For instance, economics is considered a pillar of financial science, where both macro and microeconomic factors affect virtually levels of financial decisions and outcomes at all levels. Additionally, the study of behavioral finance aims to study the more "human" side of a science considered by most to be highly mathematical. This illustrates that the study of finance can, at times, be more art than science.

RELATED TERMS
  1. Behavioral Finance

    A field of finance that proposes psychology-based theories to ...
  2. Microeconomics

    The branch of economics that analyzes the market behavior of ...
  3. Credit

    1. A contractual agreement in which a borrower receives something ...
  4. Liability

    A company's legal debts or obligations that arise during the ...
  5. Macroeconomics

    The field of economics that studies the behavior of the aggregate ...
  6. Asset

    1. A resource with economic value that an individual, corporation ...
Related Articles
  1. Professionals

    Top Job Search Mistakes For Finance Grads

    Looking to land your dream job? Skip the entry-level position by avoiding these common errors.
  2. Professionals

    Financial Careers According To Hollywood

    Find out if classic films about Wall Street reflect what it's actually like to work there.
  3. Professionals

    Business Grads, Land Your Dream Job

    Companies are in need of strategic candidates, not walking resumes. Find out how to set yourself apart from the pack and land the business career you've always wanted.
  4. Professionals

    How To Land A Finance Job With A Bachelor's Degree

    Following these five tips will keep your resume out of the recycling bin.
  5. Active Trading Fundamentals

    An Introduction To Behavioral Finance

    Curious about how emotions and biases affect the market? Find some useful insight here.
  6. Professionals

    A Look At Entry-Level Careers In Finance

    Learn more about the career options that are available to you after you've obtained your finance degree.
  7. Active Trading Fundamentals

    Is finance an art or a science?

    The short answer to this question is "both". Finance, as a field of study and an area of business, definitely has strong roots in other scientific fields such as statistics and mathematics. Furthermore, ...
  8. Trading Strategies

    How can retirees protect their wealth in a bear market?

    Look at some helpful hints about how to protect your retirement nest egg when the stock market is underperforming or the economy is in recession.
  9. Fundamental Analysis

    What is the affect of the invisible hand on consumers?

    Discover how consumers help initiate and benefit from the invisible hand of the market, which naturally coordinates trade in an exchange economy.
  10. Economics

    How does the invisible hand phenomenon affect investment markets?

    Read about how the invisible hand of the market coordinates investment markets and provides social benefit and why its effects are distorted along the way.

You May Also Like

Hot Definitions
  1. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  2. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  3. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  4. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  5. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  6. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
Trading Center