Outline of finance
The following outline provides an overview and topical guide to finance: Finance – the field concerned with how individuals, businesses, and organizations raise, allocate, and manage monetary resources over time, while accounting for the risks associated with their activities and investments. == Overview == The term finance may incorporate any of the following: The study of money and other assets The management and control of those assets Profiling and managing related risks == Fundamental financial concepts == Finance – Academic discipline studying businesses and investments Arbitrage – Capitalisation of risk-free opportunities in financial markets Capital (economics) – Already-produced durable goods that are used in production of goods or services Capital asset pricing model – Finance model linking expected return to systematic risk Cash flow – Movement of money into or out of a business, project, or financial product Cash flow matching – Strategy aligning asset cash inflows with liability outflowsPages displaying short descriptions of redirect targets Debt – Obligation to pay borrowed money Default – Financial failure to meet legal conditions of a loan Consumer debt – Amount owed by individual consumers Debt consolidation – Form of debt refinancing Debt settlement – Settlement negotiated with a debtor's unsecured creditor Credit counseling – Process to help debtors Bankruptcy – Legal status for relief from debts Debt diet – Debt management planPages displaying short descriptions of redirect targets Debt-snowball method – Personal finance strategyPages displaying short descriptions of redirect targets Debt of developing countries Financial ethics – Application of ethical principles to the area of business activitiesPages displaying short descriptions of redirect targets Asset types Real estate – Land, including its buildings and resources Securities – Tradable financial assetPages displaying short descriptions of redirect targets Commodities – Fungible item produced to satisfy wants or needsPages displaying short descriptions of redirect targets Futures – Standardised contract to buy or sell an asset at a future date Cash – Physical currency and other immediately accessible liquid assets Discounted cash flow – Method of valuing a project, company, or asset Financial capital – Economic resources used to buy what is needed to make products or provide services Funding – Act of providing resources Entrepreneur – Person who owns and operates a business Entrepreneurship – Taking financial risks in the hope of profit Fixed income analysis – Process of valuing debt securities by assessing their risk and return Gap financing – Short-term loan covering the gap between available funds and total financing needs Global financial system – Global framework for capital flows Hedge – Investment position used to offset potential losses in another asset Basis risk – Risk that a hedge and its underlying asset do not move perfectly together Interest rate – Percentage of a sum of money charged for its use Risk-free interest rate – Interest rate for zero risk investment Term structure of interest rates – Relationships among bond yields of different maturitiesPages displaying short descriptions of redirect targets Short-rate model – Interest-rate model describing the stochastic evolution of the instantaneous short rate Vasicek model – Mathematical model of interest rates Cox–Ingersoll–Ross model – Stochastic model for the evolution of financial interest rates Hull–White model – Model of future interest rates Chen model – Three-factor short-rate model for interest-rate dynamics Black–Derman–Toy model – Short-rate model in mathematical finance Interest – Sum paid for the use of money Effective interest rate – Precisely defined interest rate Nominal interest rate – Interest rate without adjusting for inflation Interest rate basis – Calculation method for the accrual of interestPages displaying short descriptions of redirect targets Fisher equation – Estimate of future interest rates Crowding out – Reduction in private investment caused by increased government borrowing Annual percentage rate – Interest rate for a whole year Interest coverage ratio, also known as Times interest earned – Ratio measuring a firm's ability to meet its interest paymentsPages displaying short descriptions of redirect targets Investment – Set of actions with the intent of earning profit Foreign direct investment – Cross-border investment giving a foreign investor lasting control of an enterprise Gold as an investment – Use of gold as a store of value and investment asset Over-investing – Investing more in an asset than its market value justifies Leverage – Use of borrowed funds in the purchase of an asset Long (finance) – Position in a financial instrument in which the holder owns a positive amount Liquidity Market liquidity – Finance property of an asset Accounting liquidity – Measure of a debtor's ability to pay their debts as/when they mature Funding liquidity – Ability of a financial institution to meet its payment obligations when due Margin (finance) – Type of financial collateral used to cover credit risk Mark to market – Accounting method valuing assets and liabilities at current market pricesPages displaying short descriptions of redirect targets Market impact – Concept in economics Medium of exchange – Method by which value is transferred between parties Microcredit – Small loans to impoverished borrowers Money – Object or record accepted as payment Money creation – Process by which the money supply of an economic region is increased Currency – Standardization of money Coin – Small, flat and usually round piece of material used as money Banknote – Paper money issued by a bank Counterfeit – Making a copy or imitation which is represented as the original History of money Monetary reform – Movements to amend the financial system Portfolio – Financial term for a collection of investments Modern portfolio theory – Mathematical framework for investment risk Mutual fund separation theorem – Theorem in portfolio theory Post-modern portfolio theory – Portfolio theory Reference rate – Benchmark interest rate used to price loans and financial contracts Return – Finance term; profit on an investmentPages displaying short descriptions of redirect targets Absolute return – One measure of the return of an investment portfolio Investment performance Relative return – Measure of the return on an investment Risk – Possibility of something bad happening Financial risk – Any of various types of risk associated with financing Risk management – Identification, evaluation and control of risks Financial risk management – Protecting economic value by managing risk exposure Uncompensated risk – In investments, level of additional risk Risk measure – Concept in financial mathematics Coherent risk measure – Concept in financial economics Deviation risk measure – Risk metric quantifying variability of returns around their expected value Distortion risk measure – Risk measure derived by applying a distortion function to a loss distribution Spectral risk measure – Coherent risk measure using weighted outcomes based on risk aversion Value at risk – Estimated potential loss for an investment under a given set of conditions Expected shortfall – Risk measure estimating the average loss in the worst tail of the distribution Entropic value at risk – Coherent measure for value at risk Scenario analysis – Futures studies / Futures techniques methodPages displaying short descriptions of redirect targets Short (finance) – Selling unowned financial securities Speculation – Engaging in risky financial transactions Day trading – Buying and selling financial instruments within the same trading day Position trader – Standardised contract to buy or sell an asset at a future datePages displaying short descriptions of redirect targets Spread trade – Type of financial purchase on securities Standard of deferred payment – Debt valuation in economics Store of value – Inflation-resistant asset Time horizon, also known as planning horizon – Planned duration over which an investment or decision is expected to be held Time value of money – Better to receive money now than later Discounting – When a creditor delays payments from a debtor in exchange for a fee Present value (PV), also known as Present Discounted Value (PDV) – Current worth of a future sum discounted to today Future value – Value of an asset at a specific date Net present value – Valuation in finance Internal rate of return – Method of calculating an investment's rate of return Modified internal rate of return – Measure of an investment's attractivenessPages displaying short descriptions of redirect targets Annuity – Series of payments made at equal intervalsPages displaying short descriptions of redirect targets Perpetuity – Annuity with payments made at equal intervals indefinitely Trade – Exchange of goods and services Free trade – Absence of government restriction on international trade Free market – Form of market-based economy Fair trade – Sustainable and equitable trade Unit of account – Standard numerical measure used to value and compare goods and services Volatility – Degree of variation of a trading price series over time Yield – Income return on an investment expressed as a percentage of its valuePages displaying short descriptions of redirect targets Yield curve – Relationships among bond yields of different maturities Equated monthly installment – Loan repayment variant Down payment – Upfront partial payment for the purchase of something expensive Financial Technology == History == History of finance – Academic discipline studying businesses and investmentsPages displaying short descriptions of redirect targets History of banking – Development of banking institutions and practices from antiquity to the present History of insurance – Development of insurance practices and institutions from antiquity to the present Stock market bubble – Economic bubble in a stock market Tulip mania – 17th-century economic bubble in the Netherlands South Sea Bubble – 18th-century economic speculation bubble Mississippi Company – French joint-stock companyPages displaying short descriptions of redirect targets Railway Mania – Speculative frenzy in the UK in the 1840s about railways Dot-com bubble – Tech stock speculative craze, c.