Finance is a broad term that describes activities associated with banking, leverage or debt, credit, capital markets, money, and investments.
Essentially, finance represents money management and the process of acquiring needed funds. Finance also encompasses the oversight, creation, and study of money, banking, credit, investments, assets, and liabilities that make up financial systems.
Many of the basic concepts in finance originate from microeconomic and macroeconomic theories. One of the most fundamental theories is the time value of money, which states that a dollar today is worth more than a dollar in the future.
KEY TAKEAWAYS
Finance encompasses banking, leverage or debt, credit, capital markets, money, investments, and the creation and oversight of financial systems.
Basic financial concepts are based on microeconomic and macroeconomic theories.
The finance field includes three main subcategories: personal finance, corporate finance, and public (government) finance.
Consumers and businesses use financial services to acquire financial goods and achieve financial goals.
The financial services sector is a primary driver of a nation’s economy.
