Some very interesting Economic information graphics
- How can you measure a nation’s wealth?
- How much do you earn?
- How rich is the United States?
EconGuru » Library » Finance
Definition of Corporate Finance or Managerial Finance: What is Managerial Finance? (Defined)
Managerial or corporate finance is the task of providing the funds for a corporation’s activities. For small business, this is referred to as SME finance. It generally involves balancing risk and profitability, while attempting to maximize an entity’s wealth and the value of its stock.
Definition of Personal Finance: What is Personal Finance? (Defined)
Questions in personal finance revolve around:
- How much money is needed by a person (or a family), and when?
- Where will this money come, and how?
- How to protect against unforeseen personal events, as well as in the external economy?
- How can family assets be best transferred across generations (bequests and inheritance)?
- How does the tax policy (tax subsidies or penalties) affect personal financial decisions?
- How does affect the individual financial capacity?
- How can you for a secure financial future in an environment of economic instability?
3 Dimensions of Risk Transfer: Hedging, Insuring and Diversifying (Differences Compared)
One is said to hedge a risk when the action taken to reduce one’s exposure to a loss also causes one to give up of the possibility of a gain. For example, farmers who sell their future crops before the harvest at a fixed price to eliminate the risk of a low price at harvest time also give up the possibility of profiting from high prices at harvest time. So, they are hedging their exposure to the price risk of their crops.
What are Insuring and Hedging (Comparison)
There is a fundamental difference between insuring and hedging. When you hedge, you eliminate the risk of loss by giving up the potential for gain. When you insure, you pay a premium to eliminate the risk of loss and retain the potential for gain.
How Funds Are Sold
Most mutual funds have an underwriter that has exclusive rights to distribute shares to investors. Mutual funds are generally marketed to the public either directly by the fund underwriter or indirectly through brokers acting on behalf of the underwriter. Direct marketed funds are sold through the mail, various offices of the fund, over the phone, and, increasingly, over the Internet. Investors contact the fund directly to purchase shares. For example, if you look at the financial pages of your local newspaper, you will see several advertisements for funds, along with toll-free phone numbers that you can call to receive a fund’s prospectus and an application to open an account with the fund.
What are Present Value and Future Value
Finance is all about time and risk. It’s basically a study of how people make decisions regarding the allocation of resources over time and the handling of risks of them. Playing with it requires some very fundamental techniques and strategies, which are all indispensable if not enough for success in financial markets. And the idea of present value is one of the most important that will help you value financial assets over time thus making choices between current resources and future gains.
