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intro to finance
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What is finance?
The science or study of the management of money
Why is finance considered a social science?
Finance like all social sciences is concerned with human behaviour
Why is uncertainty present in finance?
Finance is concerned with human behaviour. Human behaviour is uncertain; hence, uncertainty exists in finance.
Finance is also concerned with the future- as the future cannot be predicted, uncertainty exists
What is the difference between finance and economics?
Economics is concerened with the allocation of scarce resources; finance is concerned with with the allocation of scarce resources over time.
Economics focuses on exchanges in which money is one of the items traded whereas in finance, money appears on both sides of the trade
Identify and explain the 4 characteristics of financial transactions
Time
: money now is traded for money in the future
Uncertainty
: the amount and timing of money in the future is uncertain
Options
: in some contracts, a party can have the option to make a decision in the future that affects the subsequent transfer of money
Information
: info about the future can reduce uncertainty associated with the amount and timing of future monetary transfers
What are the benefits of studying finance?
Ability to manage on finances
operate in the world of business
to pursue a career in finance
Identify and distinguish between the different areas of study in finance
Investment finance
: looks at finance from an individual investor's point of view
Corporate
: looks at finance from the company's point of view.
Author
kirstenp
ID
303154
Card Set
intro to finance
Description
ACC1000 intro to finance
Updated
5/23/2015, 4:31:48 AM
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