What Is Finance?

Finance is an expansive field that encompasses a multitude of activities and subjects, such as managing money to investing.

Finance also refers to the systems and institutions through which economic activities take place. Without them, there would be no economic activity.

Financial managers, such as bankers or brokers, channel funds from savers to economic entities in need (like governments and business firms) through credit or loans or invested capital, with the aim of maximizing earnings while minimizing risks and volatility.

Corporate finance, also referred to as business finance, involves the management of corporations and their efforts to increase shareholder value. It utilizes economics, statistics and accounting techniques in order to maximize a company’s objectives and financial resources.

Social finance is an area of economics that involves investments in nonprofit organizations and other groups with the purpose of improving people’s quality of life within communities or societies. This encompasses both equity and debt financing as well as investments into cooperatives, social enterprises or charities.

Many economics majors are exposed to finance through their studies of economics. While both fields share many similarities, it’s essential to recognize that economics has a more global perspective while finance focuses on individual or company-specific concerns.