Outline of finance

The following outline is provided as an overview of and topical guide to finance:

Finance – addresses the ways in which individuals and organizations raise and allocate monetary resources over time, taking into account the risks entailed in their projects.

Overview[edit]

The term finance may incorporate any of the following:

The study of money and other assets
The management and control of those assets
Profiling and managing project risks

Fundamental financial concepts[edit]

Finance

History[edit]

History of banking
History of insurance
Tulip mania (Dutch Republic), 1620s/1630s
South Sea Bubble (UK) & Mississippi Company (France), 1710s; see also Stock market bubble
Vix pervenit 1745, on usury and other dishonest profit
Panic of 1837 (US)
Railway Mania (UK), 1840s
Erie War (US), 1860s
Long Depression, 1873–1896 (mainly US and Europe, though other parts of the world were affected)
Post-World War I hyperinflation; see Hyperinflation and Inflation in the Weimar Republic
Wall Street Crash of 1929
Great Depression 1930s
Bretton Woods Accord 1944
1973 oil crisis
1979 energy crisis
Savings and Loan Crisis 1980s
Black Monday 1987
Asian financial crisis 1990s
Dot-com bubble 1995-2001
Stock market downturn of 2002
United States housing bubble
Financial crisis of 2007–08, followed by the Great Recession

Finance terms by field[edit]

Accounting (financial record keeping)[edit]

Banking[edit]

See articles listed under: Bank § See also

Corporate finance[edit]

Investment management[edit]

Personal finance[edit]

529 plan (US college savings)
ABLE account (US plan for benefit of individuals with disabilities)
Asset allocation
- Asset location
Budget
Coverdell Education Savings Account (Coverdell ESAs, formerly known as Education IRAs)
Credit and debt
- Credit card
- Debt consolidation
- Mortgage loan
  - Continuous-repayment mortgage
Debit card
Direct deposit
Employment contract
- Commission
- Employee stock option
- Employee or fringe benefit
- Health insurance
- Paycheck
- Salary
- Wage
Financial literacy
Insurance
Predatory lending
Retirement plan
- Australia – Superannuation in Australia
- Canada
  - Registered retirement savings plan
  - Tax-free savings account
- Japan – Nippon individual savings account
- New Zealand – KiwiSaver
- United Kingdom
  - Individual savings account
  - Self-invested personal pension
- United States
- Pension
Simple living
Social security
Tax advantage
Wealth
Comparison of accounting software
Personal financial management
Investment club
Collective investment scheme

Public finance[edit]

Central bank
Federal Reserve
Fractional-reserve banking
- Deposit creation multiplier
Tax
- Capital gains tax
- Estate tax (and inheritance tax)
- Gift tax
- Income tax
- Inheritance tax
- Payroll tax
- Property tax (including land value tax)
- Sales tax (including value added tax, excise tax, and use tax)
- Transfer tax (including stamp duty)
- Tax advantage
- Tax, tariff and trade
- Tax amortization benefit
Crowding out
Industrial policy
Agricultural policy
Currency union
Monetary reform

Constraint finance[edit]

Insurance[edit]

Economics and finance[edit]

Finance-related areas of economics
Corporate finance theory:
Asset pricing theory:
Asset pricing models:
- Equilibrium pricing
  - Equities; foreign exchange and commodities
  - Bonds; other interest rate instruments
- Risk neutral pricing
  - Equities; foreign exchange and commodities; interest rates
    - Black–Scholes
    - Black
    - Garman–Kohlhagen
    - Heston
    - CEV
    - SABR
  - Bonds; other interest rate instruments

Mathematics and finance[edit]

Time value of money[edit]

Financial mathematics[edit]

Mathematical tools[edit]

Derivatives pricing[edit]

Underlying logic (see also #Economics and finance above)
Forward contract
- Forward contract pricing
Futures
- Futures contract pricing
Options (incl. Real options and ESOs)
Swaps
- Swap valuation
Interest rate derivatives (bond options, swaptions, caps and floors, and others)
- Black model
- Short-rate models (generally applied via lattice based- and specialized simulation-models, although "Black like" formulae exist in some cases.)
- Forward rate / Forward curve -based models (Application as per short-rate models)
  - LIBOR market model (also called: Brace–Gatarek–Musiela Model, BGM)
  - Heath–Jarrow–Morton Model (HJM)
  - Cheyette model
Valuation adjustments
- Credit valuation adjustment
- XVA

Portfolio mathematics[edit]

#Mathematical techniques below
#Quantitative investing below
Modern portfolio theory § Mathematical model
Portfolio optimization
- § Optimization methods
- § Mathematical tools
Merton's portfolio problem
Kelly criterion
Roy's safety-first criterion
Specific applications:

Financial markets[edit]

Market and instruments[edit]

Equity market[edit]

Equity valuation[edit]

Investment theory[edit]

Bond market[edit]

Money market[edit]

Futures markets and contracts[edit]

Option markets and contracts[edit]

Options

Swap markets and contracts[edit]

Swap (finance)

Derivative markets by underlyings[edit]

Equity derivatives[edit]

Contract for difference (CFD)
Exchange-traded fund (ETF)
- Closed-end fund
- Inverse exchange-traded fund
Equity options
Equity swap
Real estate investment trust (REIT)
Warrants
- Covered warrant

Interest rate derivatives[edit]

LIBOR
Forward rate agreement
Interest rate swap
Interest rate cap
Exotic interest rate option
Bond option
Interest rate future
Money market instruments
Range accrual Swaps/Notes/Bonds
In-arrears Swap
Constant maturity swap (CMS) or Constant Treasury Swap (CTS) derivatives (swaps, caps, floors)
Interest rate Swaption
Bermudan swaptions
Cross currency swaptions
Power Reverse Dual Currency note (PRDC or Turbo)
Target redemption note (TARN)
CMS steepener
Snowball
Inverse floater
Strips of Collateralized mortgage obligation
Ratchet caps and floors

Credit derivatives[edit]

Foreign exchange derivative[edit]

Financial regulation[edit]

Designations and accreditation[edit]

Litigation[edit]

Liabilities Subject to Compromise

Fraud[edit]

Industry bodies[edit]

Regulatory bodies[edit]

International[edit]

European Union[edit]

Regulatory bodies by country[edit]

United Kingdom[edit]

United States[edit]

United States legislation[edit]

Actuarial topics[edit]

Actuarial topics

Valuation[edit]

Note that this section is corporate-finance-focused; for the valuation of derivatives and interest rate / fixed income instruments see § Derivatives pricing above; for the economic theory see § Economics and finance above.

Underlying theory[edit]

Context[edit]

Considerations[edit]

Discounted cash flow valuation[edit]

Bond valuation
- Modelling
- Results
  - Clean price
  - Dirty price
  - Yield to maturity
  - Coupon yield
  - Current yield
  - Duration
  - Convexity
  - embedded options:
- Cash flows
  - Principal (finance)
  - Coupon (bond)
  - Fixed rate bond
  - Floating rate note
  - Zero-coupon bond
  - Accrual bond
  - sinking fund provisions
Real estate valuation
- Intrinsic value (finance) § Real estate
- Income approach

Equity valuation

Relative valuation[edit]

Bonds

Real estate

Equity

Contingent claim valuation[edit]

Valuation techniques
- general
- as typically employed
Applications
- Corporate investments and projects
- Balance sheet assets and liabilities
  - warrants and other convertible securities
  - securities with embedded options such as callable bonds
  - employee stock options
  - structured finance investments (funding dependent)
  - special purpose entities (funding dependent)

Other approaches[edit]

"Fundamentals"-based (relying on accounting information)

Portfolio theory[edit]

General concepts[edit]

Modern portfolio theory[edit]

Portfolio optimization

Theory and results (derivation of the CAPM)

Related measures

Optimization models
- Markowitz model
- Treynor–Black model

Equilibrium pricing models (CAPM and extensions)
- Capital asset pricing model (CAPM)
- Consumption-based capital asset pricing model (CCAPM)
- Intertemporal CAPM (ICAPM)
- Single-index model
- Multiple factor models (see Risk factor (finance))

Post-modern portfolio theory[edit]

Approaches

Optimization considerations
- Pareto efficiency
- Bayesian efficiency
- Multiple-criteria decision analysis
- Multi-objective optimization
- Stochastic dominance
  - Second-order Stochastic dominance
  - Marginal conditional stochastic dominance
- Downside risk
- Risk parity
- Tail risk parity
- Volatility skewness
- Semivariance
- Expected shortfall (ES; also called conditional value at risk (CVaR), average value at risk (AVaR), expected tail loss (ETL))
- Tail value at risk
- Statistical dispersion
- Discounted maximum loss
- Indifference price

Measures

Optimization models
- Black–Litterman model
- Universal portfolio algorithm

Performance measurement[edit]

Mathematical techniques[edit]

Quantitative investing[edit]

Financial software tools[edit]

Financial institutions[edit]

Financial institutions

Education[edit]

For the typical finance career path and corresponding education requirements see:
- Financial analyst generally, and esp. § Qualification, discussing various investment, banking, and corporate roles (i.e. financial management, corporate finance, investment banking, securities analysis & valuation, portfolio & investment management, credit analysis, working capital & treasury management; see Financial modeling § Accounting)
- Quantitative analyst, Quantitative analysis (finance) § Education and Financial engineering § Education, specifically re roles in quantitative finance (i.e. derivative pricing & hedging, interest rate modeling, financial risk management, financial engineering, computational finance; also, the mathematically-intensive variant on the banking roles; see Financial modeling § Quantitative finance)
Business education lists undergraduate degrees in business, commerce, accounting and economics; "finance" may be taken as a major in most of these, whereas "quantitative finance" is almost invariably postgraduate, following a math-focused Bachelors; the most common degrees for (entry level) investment, banking, and corporate roles are:
- Bachelor of Business Administration (BBA)
- Bachelor of Commerce (BCom)
- Bachelor of Accountancy (B.Acc)
- Bachelor of Economics (B.Econ)
- The “tagged” BS / BA in Finance (the undergraduate version of the MSF below), or less common, in Investment Management or in Personal Finance
At the postgraduate level, the MBA, MCom and MSM (and often the Master of Applied Economics) similarly offer training in finance generally; at this level there are also the following specifically focused masters degrees - see Master of Finance § Comparison with other qualifications for their focus and inter-relation:
- Master of Applied Finance (M.App.Fin)
- Master of Computational Finance
- Masters in Corporate Finance
- Master of Finance (M.Fin, MIF)
- Master of Financial Economics
- Master of Financial Engineering (MFE)
- Master of Financial Planning
- Masters in Financial Management
- Master of Financial Mathematics
- Masters in Financial Risk Management
- Masters in Investment Management
- Master of Mathematical Finance
- Master of Quantitative Finance (MQF)
- Master of Science in Finance (MSF, MSc Finance)
- Master of Science in Global Finance
Doctoral-training in finance is usually a requirement for academia, but not relevant to industry
- quants often enter the profession with PhDs in disciplines such as physics, mathematics, engineering, and computer science, and learn finance "on the job”
- as an academic field, finance theory is studied and developed within the disciplines of management, (financial) economics, accountancy, and applied / financial mathematics.
For specialized roles, there are various Professional Certifications in financial services (see #Designations and accreditation above); the best recognized are arguably:
- Association of Corporate Treasurers (MCT / FCT)
- Certificate in Quantitative Finance (CQF)
- Certified Financial Planner (CFP)
- Certified International Investment Analyst (CIIA)
- Certified Treasury Professional (CTP)
- Chartered Alternative Investment Analyst (CAIA)
- Chartered Financial Analyst (CFA)
- Chartered Wealth Manager (CWM)
- CISI Diploma in Capital Markets (MCSI)
- Financial Risk Manager (FRM)
- Professional Risk Manager (PRM)
Various organizations offer executive education, CPD, or other focused training programs, including:
See also qualifications in related fields:

Related lists[edit]

External links[edit]

Wharton Finance Knowledge Project – finance knowledge for students, teachers, and self-learners.
Prof. Aswath Damodaran - financial theory, with a focus in Corporate Finance, Valuation and Investments. Updated Data, Excel Spreadsheets.
Web Sites for Discerning Finance Students (Prof. John M. Wachowicz) -Links to finance web sites, grouped by topic
studyfinance.com - introductory finance web site at the University of Arizona
BF gallery - introductory articles, full glossary and links to resources on behavioral finance
SECLaw.com - law of the financial markets
TheStreet.com Glossary - stock market related definitions