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Finance Overview
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Finance Overview
Book Chapter

Finance Overview

2013,2012
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Overview
This chapter provides an explanation of the basic principles of finance: time value of money, risk and reward, and discount rate. The financial system plays a vital role in the global economy. The purpose of the financial system is to efficiently and optimally allocate savings to investments; In other words, to distribute money to those who need money. It is that allocation of savings to investment which is what the study of finance is all about. The financial world can be divided into three groups: those who have extra money to invest (savers), those who need money for some purpose (borrowers), and the financial institutions that bring them together. The chapter explains how companies decide what to invest in and how to finance the investment. It concludes with a discussion on how to value financial instruments, including bonds, stocks, and options.
Publisher
John Wiley & Sons, Incorporated,John Wiley & Sons, Inc
ISBN
1118487621, 9781118487624