Finance is a term for matters regarding the management, creation, and study of money and investments. It involves the use of credit and debt, securities, and investment to finance current projects using future income flows. Because of this temporal aspect, finance is closely linked to the time value of money, interest rates, and other related topics.
Finance can be broadly divided into three categories:
Public finance
Corporate finance
Personal finance
There are many other specific categories, such as behavioral finance, which seeks to identify the cognitive (e.g., emotional, social, and psychological) reasons behind financial decisions.
KEY TAKEAWAYS
Finance is a term broadly describing the study and system of money, investments, and other financial instruments.
Finance can be divided broadly into three distinct categories: public finance, corporate finance, and personal finance.
More recent subcategories of finance include social finance and behavioral finance.
The history of finance and financial activities dates back to the dawn of civilization. Banks and interest-bearing loans existed as early as 3000 BC. Coins were being circulated as early as 1000 BC.
While it has roots in scientific fields, such as statistics, economics, and mathematics, finance also includes non-scientific elements that liken it to an art.
