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

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 related risks

Fundamental financial concepts

Finance

History

History of finance
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

Accounting (financial record keeping)

Main articles: Accounting and List of accounting topics

Banking

See articles listed under: Bank § See also

Constraint finance

Insurance

Main article: Insurance

Economics and finance

Main articles: Financial economics and Asset pricing

Finance-related areas of economics

Corporate finance theory

Further information: Financial economics § Corporate finance theory, and Financial economics § Certainty

Asset pricing theory

Main article: Asset pricing

Further information: Financial economics § Underlying economics

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

Time value of money

Main article: Time value of money

Financial mathematics

Main article: Financial mathematics

Mathematical tools

Derivatives pricing

Main article: Financial mathematics § Derivatives pricing

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
Yield curve modelling

Portfolio mathematics

#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

 Financial markets

Market and instruments

Equity market

Main article: Equity market

Equity valuation

Main article: Equity valuation

Investment theory

Main article: Investment theory

Bond market

Main article: Bond market

Money market

Main article: Money market

Commodity market

Main article: Commodity market

Commodity

Derivatives market

Main article: Derivatives market

Derivative (finance)
(see also Financial mathematics topics; Derivatives pricing)
Underlying instrument

Forward markets and contracts

Main article: Forward market

Forward contract

Futures markets and contracts

Main article: Futures market

Option markets and contracts

Options

Swap markets and contracts

Main article: Swap market

Swap (finance)

Derivative markets by underlyings

Equity derivatives

Main article: Equity derivative

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

Main article: Interest rate derivative

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
- Interest only (IO)
- Principal only (PO)
Ratchet caps and floors

Credit derivatives

Main article: Credit derivative

Foreign exchange derivative

Main article: Foreign exchange derivative

Financial regulation

Designations and accreditation

Further information: Professional certification in financial services; Professional certification § Accountancy, auditing and finance; and § Education

Litigation

Liabilities Subject to Compromise

Fraud

Industry bodies

Regulatory bodies

Main article: List of financial regulatory authorities by country

International

European Union

Regulatory bodies by country

United Kingdom

United States

United States legislation

Actuarial topics

Actuarial topics

Valuation

This section is corporate-finance-focused: for the valuation of derivatives and interest rate / fixed income instruments see § Derivatives pricing; for the economic theory see § Asset pricing theory.

Underlying theory

Context

Considerations

Discounted cash flow valuation

Main article: Valuation using discounted cash flows

Further information: Discounted cash flow and Time value of money

Bond valuation
- Modeling
- 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

Main article: Relative valuation

Contingent claim valuation

Main article: Contingent claim valuation

Valuation techniques
- general
- as typically employed
Applications
- Corporate investments and projects
  - Real options
  - Corporate finance § Valuing flexibility
  - Contingent value rights
  - Business valuation § Option pricing approaches
  - structured finance investments (funding dependent)
  - special purpose entities (funding dependent)
- Balance sheet assets and liabilities
  - warrants and other convertible securities
  - securities with embedded options such as callable bonds
  - employee stock options

Other approaches

"Fundamentals"-based (relying on accounting information)

Financial modeling

Further information: Financial modeling § Accounting

Not to be confused with Financial modeling § Quantitative finance.

Portfolio theory

General concepts

Modern portfolio theory

Main article: Modern portfolio theory

Further information: Financial economics § Uncertainty

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

Main article: Post-modern portfolio theory

Further information: Financial economics § Portfolio theory

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
- 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

Mathematical techniques

Quantitative investing

Main article: Quantitative investing

Financial software tools

Financial modeling applications

Main article: Financial modeling

Corporate Finance

Business valuation / stock valuation - especially via discounted cash flow, but including other valuation approaches
Scenario planning and management decision making ("what is"; "what if"; "what has to be done"^[1])
Capital budgeting, including cost of capital (i.e. WACC) calculations
Financial statement analysis / ratio analysis (including of operating- and finance leases, and R&D)
Revenue related: forecasting, analysis
Project finance modeling
Cash flow forecasting
Credit decisioning: Credit analysis, Consumer credit risk; impairment- and provision-modeling
Working capital- and treasury management; asset and liability management
Management accounting: Activity-based costing, Profitability analysis, Cost analysis, Whole-life cost

Quantitative finance

Option pricing and calculation of their "Greeks"
Other derivatives, especially interest rate derivatives, credit derivatives and exotic derivatives
Modeling the term structure of interest rates (bootstrapping / multi-curves, short-rate models, HJM framework) and credit spreads
Credit valuation adjustment, CVA, as well as the various XVA
Credit risk, counterparty credit risk, and regulatory capital: EAD, PD, LGD, PFE
Structured product design and manufacture
Portfolio optimization^[2] and Quantitative investing more generally; see further re optimization methods employed.
Financial risk modeling: value at risk (parametric- and / or historical, CVaR, EVT), stress testing, "sensitivities" analysis

Financial institutions

Education

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)
- Bachelor of Finance - the undergraduate version of the MSF below
- The tagged BS / BA "in Finance", or less common, "in Investment Management" or "in Personal Finance"
At the postgraduate level, the MBA, MCom and MSM (and recently the Master of Applied Economics) similarly offer training in finance generally; at this level there are also the following specifically focused master's degrees, with MSF the broadest - see Master of Finance § Comparison with other qualifications for their focus and inter-relation:
- Master of Applied Finance (M.App.Fin)
- Master of Commerce in Finance (MCom)
- Master of Computational Finance
- Master's in Corporate Finance
- Master of Finance (M.Fin, MIF)
- Master's in Financial Analysis
- Master of Financial Economics
- Master of Financial Engineering (MFE)
- Master of Financial Planning
- Master's in Financial Management
- Master of Financial Mathematics
- Master's in Financial Risk Management
- Master's in Investment Management
- Master of Mathematical Finance
- Master of Quantitative Finance (MQF)
- Master of Science in Finance (MSF, MSc Finance)
- MS in Fintech
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

References

External links

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