What is Finance?
Finance is the study of the interaction of firms and financial markets. Financial managers attempt to identify projects that increase firm value and determine the best means by which to finance the projects they undertake. Project evaluation, and resources allocation and financing are the essential topics of financial management.
Investors, the source of financing for these projects, are free to choose from many types of securities issued by different types of firms. The risk-return profiles of these individual securities, and the impact of portfolio design on the attainment of optimal risk-return profiles, are the major topic areas of asset / investment management.
