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
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
- Arbitrage
- Capital (economics)
- Capital asset pricing model
- Cash flow
- Cash flow matching
- Debt
- Default
- Consumer debt
- Debt consolidation
- Debt settlement
- Credit counseling
- Bankruptcy
- Debt diet
- Debt-snowball method
- Debt of developing countries
- Asset types
- Discounted cash flow
- Financial capital
- Entrepreneur
- Fixed income analysis
- Gap financing
- Global financial system
- Hedge
- Interest rate
- Short-rate model
- Vasicek model
- Cox–Ingersoll–Ross model
- Hull–White model
- Chen model
- Black–Derman–Toy model
- Interest
- Investment
- Foreign direct investment
- Gold as an investment
- Over-investing
- Leverage
- Long (finance)
- Liquidity
- Margin (finance)
- Mark to market
- Market impact
- Medium of exchange
- Microcredit
- Money
- Portfolio
- Modern portfolio theory
- Mutual fund separation theorem
- Post-modern portfolio theory
- Reference rate
- Reset
- Return
- Absolute return
- Investment performance
- Relative return
- Risk
- Financial risk
- Risk management
- Financial risk management
- Uncompensated risk
- Risk measure
- Coherent risk measure
- Deviation risk measure
- Distortion risk measure
- Spectral risk measure
- Value at risk
- Expected shortfall
- Entropic value at risk
- Scenario analysis
- Short (finance)
- Speculation
- Position trader
- Spread trade
- Standard of deferred payment
- Store of value
- Time horizon
- Time value of money
- Discounting
- Present value
- Future value
- Net present value
- Internal rate of return
- Modified internal rate of return
- Annuity
- Perpetuity
- Trade
- Unit of account
- Volatility
- Yield
- Yield curve
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)
- Auditing
- Accounting software
- Book keeping
- FASB
- Financial accountancy
- Management accounting
- Philosophy of Accounting
- Hedge accounting
Banking
- See articles listed under: Bank § See also
Corporate finance
- Balance sheet analysis
- Business plan
- Investment policy
- Business valuation
- Stock valuation
- Fundamental analysis
- Real options
- Valuation topics
- Fisher separation theorem
- Sources of financing
- Securities
- Debt
- Initial public offering
- Capital structure
- Cost of capital
- Weighted average cost of capital
- Modigliani–Miller theorem
- Hamada's equation
- Dividend policy
- Dividend
- Dividend tax
- Dividend yield
- Modigliani–Miller theorem
- Investment policy
- Corporate action
- (Strategic) Financial management
- Capital management
- Capital budgeting
- Working capital
- Current assets
- Current liabilities
- Managerial finance
- Management accounting
- Capital management
- Mergers and acquisitions
- Leveraged buyout
- Takeover
- Corporate raid
- Contingent value rights
- Real options
- Return on investment
- Loan covenant
- Cash conversion cycle
- Cash management
- Inventory optimization
- Supply chain management
- Just In Time (JIT)
- Economic order quantity (EOQ)
- Economic production quantity (EPQ)
- Economic batch quantity
- Credit (finance)
- Credit scoring
- Default risk
- Discounts and allowances
- Factoring (trade) & Supply chain finance
- Corporate budget
Investment management
Personal finance
- 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
- Financial literacy
- Insurance
- Predatory lending
- Retirement plan
- Australia – Superannuation in Australia
- Canada
- Japan – Nippon individual savings account
- New Zealand – KiwiSaver
- United Kingdom
- United States
- 401(a)
- 401(k)
- 403(b)
- 457 plan
- Keogh plan
- Individual retirement account
- Roth IRA
- Traditional IRA
- SEP IRA
- SIMPLE IRA
- Pension
- Simple living
- Social security
- Tax advantage
- Wealth
- Comparison of accounting software
- Personal financial management
- Investment club
- Collective investment scheme
Public finance
- Central bank
- Federal Reserve
- Fractional-reserve banking
- 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
Risk management
- Asset and liability management
- Asset liability mismatch
- Capital Requirements Regulation 2013 & Credit Institutions Directive 2013 (Capital Requirements Directives)
- Cash flow hedge
- Cash management
- Corporate governance
- Climate-related asset stranding
- Credit risk
- Default (finance)
- Downside risk & Upside risk
- Duration gap
- Enterprise risk management
- Financial engineering
- Financial risk
- Financial risk management
- Foreign exchange hedge
- Fuel price risk management
- Gordon–Loeb model for cyber security investments
- Interest rate risk
- Insurance
- Investment risk
- Irrational exuberance
- Kelly criterion
- Liquidity risk
- Market risk
- Operational risk
- Risk adjusted return on capital
- Risk aversion
- Risk-based internal audit
- Risk measure
- Coherent risk measure
- Deviation risk measure
- Distortion risk measure
- Spectral risk measure
- Risk modeling
- Risk of ruin
- Risk pool
- Risk register
- Risk return ratio
- Risk–return spectrum
- Security management
- Settlement risk
- Shadow banking system
- Specific risk
- St. Petersburg paradox
- Systematic risk
- Three lines of defence
- Treasury management
- Uncompensated risk
- Valuation risk
- Value at risk
- Computation
- Historical
- Monte Carlo
- variance-covariance
- delta-gamma
- Alternate measures
- Entropic value at risk
- Conditional value-at-risk / Expected shortfall
- Tail value at risk
- Extensions
- Profit at risk
- Margin at risk
- Liquidity at risk
- Earnings at risk
- Cash flow at risk
- Liquidity-adjusted VaR
- Computation
- Volatility risk
- Wrong way risk
Constraint finance
- Environmental finance
- Feminist economics
- Green economics
- Islamic economics
- Uneconomic growth
- Value of Earth
- Value of life
Insurance
- Actuarial science
- Annuities
- Catastrophe modeling
- Earthquake loss
- Extended coverage
- Insurable interest
- Insurable risk
- Insurance
- Health insurance
- Life insurance
- Life insurance tax shelter
- Permanent life insurance
- Term life insurance
- Universal life insurance
- Variable universal life insurance
- Whole life insurance
- Property insurance
- Casualty insurance
- Fidelity bond
- Liability insurance
- Political risk insurance
- Surety bond
- Terrorism insurance
- Credit insurance
- Mid-term adjustment
- Reinsurance
- Self insurance
- Travel insurance
- Niche insurance
- Insurance contract
- Loss payee clause
- Risk Retention Group
Economics and finance
Finance-related areas of economics
Corporate finance theory
- Fisher separation theorem
- Modigliani–Miller theorem
- Theory of the firm
- The Theory of Investment Value
- Agency theory
- Managerial finance
- Capital structure
- Corporate finance § Capitalization structure
- Capital structure substitution theory
- Pecking order theory
- Market timing hypothesis
- Trade-off theory of capital structure
- Merton model
- Tax shield
- Dividend policy
- Corporate finance § Dividend policy
- Walter model
- Gordon model
- Lintner model
- Residuals theory
- Clientele effect
- Dividend puzzle
- Treasury stock § Buying back shares
- Dividend tax
- Capital budgeting (valuation)
- Corporate finance § Investment and project valuation
- Clean surplus accounting
- Residual income valuation
- Economic value added / Market value added
- T-model
- Adjusted present value
- Uncertainty
- Penalized present value
- Expected commercial value
- Risk-adjusted net present value
- Contingent claim valuation
- Real options
- Monte Carlo methods
- Risk management
Asset pricing theory
- Value (economics)
- Financial markets
- Stylized fact
- Regulatory economics
- Market microstructure
- Walrasian auction
- Fisher market
- Arrow-Debreu market
- Matching market
- Market design
- Agent-based model
- Representative agent
- Aggregation problem
- Heterogeneity in economics
- Heterogeneous agent model
- Agent-based model § In economics and social sciences
- Artificial financial market
- General equilibrium theory
- Equilibrium price
- Market efficiency
- Economic equilibrium
- Rational expectations
- Risk factor (finance)
- Arbitrage-free price
- Rational pricing
- Contingent claim analysis
- Brownian model of financial markets
- Complete market & Incomplete markets
- Utility
- Risk aversion
- Expected utility hypothesis
- Utility maximization problem
- Marginal utility
- Quasilinear utility
- Generalized expected utility
- Economic efficiency
- Efficient-market hypothesis
- efficient frontier
- Production–possibility frontier
- Allocative efficiency
- Pareto efficiency
- Productive efficiency
- Dumb agent theory
- State prices
- Arrow–Debreu model
- Stochastic discount factor
- Pricing kernel
- Application:
- Arrow–Debreu model § Economics of uncertainty: insurance and finance
- State prices § Application to financial assets
- Fundamental theorem of asset pricing
- Rational pricing
- Arbitrage-free
- No free lunch with vanishing risk
- Self-financing portfolio
- Stochastic dominance
- Marginal conditional stochastic dominance
- Martingale pricing
- Brownian model of financial markets
- Random walk hypothesis
- Risk-neutral measure
- Martingale (probability theory)
- Sigma-martingale
- Semimartingale
- Quantum finance
Asset pricing models
- Equilibrium pricing
- Equities; foreign exchange and commodities
- Capital asset pricing model
- Consumption-based CAPM
- Intertemporal CAPM
- Single-index model
- Multiple factor models
- Fama–French three-factor model
- Carhart four-factor model
- Arbitrage pricing theory
- Bonds; other interest rate instruments
- Vasicek
- Rendleman–Bartter
- Cox–Ingersoll–Ross
- Equities; foreign exchange and commodities
- Risk neutral pricing
- Equities; foreign exchange and commodities; interest rates
- Black–Scholes
- Black
- Garman–Kohlhagen
- Heston
- CEV
- SABR
- Bonds; other interest rate instruments
- Ho–Lee
- Hull–White
- Black–Derman–Toy
- Black–Karasinski
- Kalotay–Williams–Fabozzi
- Longstaff–Schwartz
- Chen
- Rendleman–Bartter
- Heath–Jarrow–Morton
- Cheyette
- Brace–Gatarek–Musiela
- Equities; foreign exchange and commodities; interest rates
Mathematics and finance
Time value of money
Financial mathematics
Mathematical tools
- Probability
- Stochastic calculus
- Monte Carlo methods
- Low-discrepancy sequence
- Monte Carlo integration
- Quasi-Monte Carlo method
- Random number generation
- Partial differential equations
- Volatility
- ARCH model
- GARCH model
- Stochastic volatility
- Stochastic volatility jump
Derivatives pricing
- Underlying logic (see also #Economics and finance above)
- Rational pricing
- Risk-neutral measure
- Arbitrage-free pricing
- Brownian model of financial markets
- Martingale pricing
- Rational pricing
- Forward contract
- Futures
- Options (incl. Real options and ESOs)
- Valuation of options
- Black–Scholes formula
- Approximations for American options
- Barone-Adesi and Whaley
- Bjerksund and Stensland
- Black's approximation
- Optimal stopping
- Roll–Geske–Whaley
- Approximations for American options
- Black model
- Binomial options model
- Finite difference methods for option pricing
- Garman–Kohlhagen model
- The Greeks
- Lattice model (finance)
- Margrabe's formula
- Monte Carlo methods for option pricing
- Monte Carlo methods in finance
- Quasi-Monte Carlo methods in finance
- Least Square Monte Carlo for American options
- Trinomial tree
- Volatility
- Implied volatility
- Historical volatility
- Volatility smile (& Volatility surface)
- Stochastic volatility
- Constant elasticity of variance model
- Heston model
- SABR volatility model
- Local volatility
- Swaps
- 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.)
- Rendleman–Bartter model
- Vasicek model
- Ho–Lee model
- Hull–White model
- Cox–Ingersoll–Ross model
- Black–Karasinski model
- Black–Derman–Toy model
- Kalotay–Williams–Fabozzi model
- Longstaff–Schwartz model
- Chen model
- 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
- Yield curve modelling
Portfolio mathematics
- #Mathematical techniques below
- #Quantitative investing below
- Modern portfolio theory § Mathematical model
- Portfolio optimization
- Merton's portfolio problem
- Kelly criterion
- Roy's safety-first criterion
- Specific applications:
- Black–Litterman model
- Universal portfolio algorithm
- Markowitz model
- Treynor–Black model
Financial markets
Financial markets
Market and instruments
- Capital markets
- Securities
- Financial markets
- Primary market
- Initial public offering
- Aftermarket
- Free market
- Bull market
- Bear market
- Bear market rally
- Market maker
- Dow Jones Industrial Average
- Nasdaq
- List of stock exchanges
- List of stock market indices
- List of corporations by market capitalization
- Value Line Composite Index
Equity market
Equity valuation
- Dow theory
- Elliott wave principle
- Economic value added
- Fibonacci retracement
- Gordon model
- Growth stock
- PEG ratio
- PVGO
- Mergers and acquisitions
- Leveraged buyout
- Takeover
- Corporate raid
- PE ratio
- Market capitalization
- Income per share
- Stock valuation
- Technical analysis
- Chart patterns
- V-trend
- Paper valuation
Investment theory
- Behavioral finance
- Dead cat bounce
- Efficient market hypothesis
- Market microstructure
- Stock market crash
- Stock market bubble
- January effect
- Mark Twain effect
- Quantitative behavioral finance
- Quantitative analysis (finance)
- Statistical arbitrage
Bond market
Money market
- Repurchase agreement
- International Money Market
- Currency
- Exchange rate
- International currency codes
- Table of historical exchange rates
Commodity market
- Commodity
- Asset
- Commodity Futures Trading Commission
- Commodity trade
- Drawdowns
- Forfaiting
- Fundamental analysis
- Futures contract
- Fungibility
- Gold as an investment
- Hedging
- Jesse Lauriston Livermore
- List of traded commodities
- Ownership equity
- Position trader
- Risk (Futures)
- Seasonal traders
- Seasonal spread trading
- Slippage
- Speculation
- Spread trade
- Technical analysis
- Breakout
- Bear market
- Bottom (technical analysis)
- Bull market
- MACD
- Moving average
- Open Interest
- Parabolic SAR
- Point and figure charts
- Resistance
- RSI
- Stochastic oscillator
- Stop loss
- Support
- Top (technical analysis)
- Trade
- Trend
Derivatives market
Forward markets and contracts
Futures markets and contracts
- Backwardation
- Contango
- Futures contract
- Financial future
- Currency future
- Interest rate future
- Single-stock futures
- Stock market index future
- Financial future
- Futures exchange
Option markets and contracts
- Options
- Stock option
- Warrants
- Foreign exchange option
- Interest rate options
- Bond options
- Real options
- Options on futures
Swap markets and contracts
Equity derivatives
- Contract for difference (CFD)
- Exchange-traded fund (ETF)
- Equity options
- Equity swap
- Real estate investment trust (REIT)
- Warrants
- Covered warrant
Interest rate derivatives
- 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
Financial regulation
Designations and accreditation
- Certified Financial Planner
- Chartered Financial Analyst
- Chartered Alternative Investment Analyst
- Professional risk manager
- Chartered Financial Consultant
- Canadian Securities Institute
- Independent financial adviser
- Financial risk manager
- Chartered Market Technician
- Certified Financial Technician
Litigation
- Liabilities Subject to Compromise
Fraud
- Forex scam
- Insider trading
- Legal origins theory
- Petition mill
- Ponzi scheme
Industry bodies
International
United States
- Commodity Futures Trading Commission
- Federal Reserve
- Federal Trade Commission
- Municipal Securities Rulemaking Board
- Office of the Comptroller of the Currency
- Securities and Exchange Commission
United States legislation
Actuarial topics
- Actuarial topics
Valuation
Underlying theory
- Value (economics)
- Valuation (finance) and specifically § Valuation overview
- "The Theory of Investment Value"
- Financial economics § Corporate finance theory
- Valuation risk
- Real versus nominal value (economics)
- Real prices and ideal prices
- Fair value
- Intrinsic value
- Market price
- Value in use
- Fairness opinion
- Asset pricing (see also #Asset pricing theory above)
Context
- (Corporate) Bonds
- Equity valuation
- Real estate valuation
Considerations
- Bonds
- covenants and indentures
- secured / unsecured debt
- senior / subordinated debt
- embedded options
- Equity
- Minimum acceptable rate of return
- Margin of safety (financial)
- Enterprise value
- Sum-of-the-parts analysis
- Minority discount
- Control premium
- Accretion/dilution analysis
- Certainty equivalent
- Haircut (finance)
- Paper valuation
Discounted cash flow valuation
- 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
- Net Operating Income
- Real estate appraisal § The income approach
- German income approach
- Equity valuation
- Results
- Net present value
- Adjusted present value
- Equivalent Annual Cost
- Payback period
- Discounted payback period
- Internal rate of return
- Modified Internal Rate of Return
- Return on investment
- Profitability index
- Specific models and approaches
- Dividend discount model
- Gordon growth model
- Market value added / Economic value added
- Residual income valuation
- First Chicago Method
- rNPV
- Fed model
- Sum of perpetuities method
- Benjamin Graham formula
- LBO valuation model
- Goldman Sachs asset management factor model
- Cash flows
- Cash flow forecasting
- EBIDTA
- NOPAT
- Free cash flow
- Dividends
- Valuation using discounted cash flows § Determine cash flow for each forecast period
- Results
Relative valuation
- Bonds
- Bond valuation § Relative price approach
- Yield spread
- Credit spread (bond)
- Bond credit rating
- Altman Z-score
- Ohlson O-score
- Book value
- Debt-to-equity ratio
- Debt-to-capital ratio
- Current ratio
- Quick ratio
- Debt ratio
- Real estate
- Capitalization rate
- Gross rent multiplier
- Sales comparison approach
- Cash on cash return
- Equity
- Financial ratio
- Market-based valuation
- Valuation using multiples
- Comparable company analysis
- Dividend yield
- Yield gap
- Return on equity
- PE ratio
- P/B ratio
- Price to cash based earnings
- Price to Sales
- EV/EBITDA
- EV/Sales
- Stock image
- Valuation using the Market Penetration Model
- Graham number
- Tobin's q
Contingent claim valuation
- Valuation techniques
- 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
- Corporate investments and projects
Other approaches
- "Fundamentals"-based (relying on accounting information)
- T-model
- Residual income valuation
- Clean surplus accounting
- Net asset value method
- Excess earnings method
- Historical earnings valuation
- Future maintainable earnings valuation
- Graham number
Financial modeling
- Cash flow
- Cash flow forecasting
- Cash flow statement
- Operating cash flow
- EBIDTA
- NOPAT
- Free cash flow
- Dividends
- Cash is king
- Mid-year adjustment
- Owner earnings
- Required return (i.e. discount rate)
- Valuation using discounted cash flows § Determine discount factor / rate
- Cost of capital
- Weighted average cost of capital
- Cost of equity
- Cost of debt
- Capital asset pricing model
- Beta (finance) § Empirical estimation
- Hamada's equation
- Pure play method
- Arbitrage pricing theory
- Business valuation § Build-up method
- T-model
- cash-flow T-model
- Terminal value
- Valuation using discounted cash flows § Determine the continuing value
- Forecast period (finance)
- long term growth rate
- Forecasted financial statements
- Financial forecast
- Financial modeling § Accounting
- Pro forma § Financial statements
- Revenue
- Costs
- Profit margin
- Operating expenses
- Operating ratio
- Cost driver
- Fixed cost
- Variable cost
- Overhead cost
- Value chain
- activity based costing
- common-size analysis
- Profit model
- Capital
- Capital structure
- common-size analysis
- Equity (finance)
- Financial capital
- Long term asset / Fixed asset
- Fixed-asset turnover
- Long-term liabilities
- Debt-to-equity ratio
- Debt-to-capital ratio
- Long term asset / Fixed asset
- Working capital
- Current asset
- Current liability
- Inventory turnover / Days in inventory
- Cost of goods sold
- Debtor & Creditor days
- Days sales outstanding
- Days payable outstanding
Portfolio theory
General concepts
- Portfolio (finance)
- Portfolio manager
- Investment management
- Active management
- Passive management (Buy and hold)
- Core & Satellite
- Smart beta
- Expense ratio
- Investment style
- Value investing
- Contrarian investing
- Growth investing
- Index investing
- Magic formula investing
- Momentum investing
- Quality investing
- Style investing
- Factor investing
- Investment strategy
- Benchmark-driven investment strategy
- Liability-driven investment strategy
- Financial risk management § Investment management
- Investor profile
- Rate of return on a portfolio / Investment performance
- Risk return ratio
- Risk–return spectrum
- Risk factor (finance)
- Portfolio optimization
- Diversification (finance)
- Asset classes
- Exter's Pyramid
- Asset allocation
- Tactical asset allocation
- Global tactical asset allocation
- Strategic asset allocation
- Dynamic asset allocation
- Tactical asset allocation
- Sector rotation
- Correlation & covariance
- Risk-free interest rate
- Leverage (finance)
- Utility function
- Intertemporal portfolio choice
- Portfolio insurance
- Mathematical finance § Risk and portfolio management: the P world
- Quantitative investment / Quantitative fund (see below)
- Uncompensated risk
Modern portfolio theory
- Portfolio optimization
- Risk return ratio
- Risk–return spectrum
- Economic efficiency
- Utility maximization problem
- Markowitz model
- Merton's portfolio problem
- Kelly criterion
- Roy's safety-first criterion
- Theory and results (derivation of the CAPM)
- Equilibrium price
- Market price
- Systematic risk
- Risk factor (finance)
- Idiosyncratic risk / Specific risk
- Mean-variance analysis (Two-moment decision model)
- Efficient frontier (Mean variance efficiency)
- Feasible set
- Mutual fund separation theorem
- Separation property (finance)
- Tangent portfolio
- Market portfolio
- Beta (finance)
- Fama–MacBeth regression
- Hamada's equation
- Capital structure substitution theory § Beta
- Capital allocation line
- Capital market line
- Security characteristic line
- Capital asset pricing model
- Single-index model
- Security market line
- Roll's critique
- Related measures
- Alpha (finance)
- Sharpe ratio
- Treynor ratio
- Jensen's alpha
- 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))
- Fama–French three-factor model
- Carhart four-factor model
- Arbitrage pricing theory (APT)
Post-modern portfolio theory
- Approaches
- Behavioral portfolio theory
- Stochastic portfolio theory
- Chance-constrained portfolio selection
- Maslowian portfolio theory
- Dedicated portfolio theory (fixed income specific)
- Risk parity
- Tail risk parity
- 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
- Dual-beta
- Downside beta
- Upside beta
- Upside potential ratio
- Upside risk
- Downside risk
- Sortino ratio
- Omega ratio
- Bias ratio
- Information ratio
- Active return
- Active risk
- Deviation risk measure
- Distortion risk measure
- Spectral risk measure
- Dual-beta
- Optimization models
- Black–Litterman model
- Universal portfolio algorithm
Performance measurement
- Alpha (finance)
- Beta (finance)
- Performance attribution
- Fixed-income attribution
- Benchmark
- Lipper average
- Returns-based style analysis
- Rate of return on a portfolio
- Holding period return
- Tracking error
- Style drift
- Simple Dietz method
- Modified Dietz method
- Modigliani risk-adjusted performance
- Upside potential ratio
- Maximum Downside Exposure
- Maximum drawdown
- Sterling ratio
- Sharpe ratio
- Treynor ratio
- Jensen's alpha
- Bias ratio
- V2 ratio
- Calmar ratio (hedge fund specific)
Mathematical techniques
- Modern portfolio theory § Mathematical model
- Quadratic programming
- Nonlinear programming
- Mixed integer programming
- Stochastic programming (§ Multistage portfolio optimization)
- Copula (probability theory) (§ Quantitative finance)
- Principal component analysis (§ Quantitative finance)
- Deterministic global optimization
- Extended Mathematical Programming (§ EMP for stochastic programming)
- Genetic algorithm (List of genetic algorithm applications § Finance and Economics)
- Artificial intelligence:
Quantitative investing
- Quantitative investing
- Quantitative fund
- Quantitative analysis (finance) § Quantitative investment management
- Quantitative analysis (finance) § Algorithmic trading quantitative analyst
- Applications of artificial intelligence § Trading and investment
- Trading:
- Portfolio optimization:
- Portfolio optimization § Optimization methods
- Portfolio optimization § Mathematical tools
- Black–Litterman model
- Universal portfolio algorithm
- Markowitz model
- Treynor–Black model
- other models
- Factor investing
- low-volatility investing
- value investing
- momentum investing
- Alpha generation platform
- Kelly criterion
- Roy's safety-first criterion
- Risks:
- Best execution
- Implementation shortfall
- Trading curb
- Market impact
- Market depth
- Slippage (finance)
- Transaction costs
- Discussion:
- Automated trading system § Market disruption and manipulation
- High-frequency trading § Risks and controversy
- Algorithmic trading § Issues and developments
- Positive feedback § Systemic risk
- 2010 flash crash
- Black Monday (1987) § Causes
- Statistical arbitrage § StatArb and systemic risk: events of summer 2007
- Leading companies (see Quantitative fund § List of notable quantitative funds):
- Prediction Company
- Renaissance Technologies
- D. E. Shaw & Co
- AQR Capital
- Barclays Investment Bank
- Cantab Capital Partners
- Robeco
- Jane Street Capital
Financial software tools
- Straight Through Processing Software
- Technical Analysis Software
- Algorithmic trading
- Electronic trading platform
- List of numerical-analysis software
- Comparison of numerical-analysis software
Financial modeling applications
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
- Bank
- List of banks
- List of banks in the Arab World
- List of banks in Africa
- List of banks in the Americas
- List of banks in Asia
- List of banks in Europe
- List of banks in Oceania
- List of international banking institutions
- Advising bank
- Central bank
- Commercial bank
- Community development bank
- Cooperative bank
- Custodian bank
- Depository bank
- Ethical bank
- Investment bank
- Islamic banking
- Merchant bank
- Microcredit
- Mutual savings bank
- Offshore bank
- Private bank
- Savings bank
- Swiss bank
- Bank holding company
- List of banks
- Building society
- Broker
- Clearing house
- Commercial lender
- Community development financial institution
- Credit rating agency
- Credit union
- Diversified financial
- Edge Act Corporation
- Export Credit Agencies
- Financial adviser
- Financial intermediary
- Financial planner
- Futures exchange
- List of futures exchanges
- Government sponsored enterprise
- Hard money lender
- Independent financial adviser
- Industrial loan company
- Insurance company
- Investment adviser
- Investment company
- Investment trust
- Large and Complex Financial Institutions
- Mutual fund
- Non-banking financial company
- Savings and loan association
- Stock exchange
- Trust company
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:
- Amsterdam Institute of Finance
- Canadian Securities Institute
- Chartered Institute for Securities & Investment
- GARP
- Global Risk Institute
- ICMA Centre
- The London Institute of Banking & Finance
- New York Institute of Finance
- PRMIA
- South African Institute of Financial Markets
- Swiss Finance Institute
- See also qualifications in related fields:
- Accounting § Education, training and qualifications
- Actuarial credentialing and exams
- Business education
- Credit analyst § Education
- Economics education
- Management § Training and education
- Chief financial officer § Qualifications
See also
Related lists
- Index of accounting articles
- Outline of business management
- Outline of marketing
- Outline of economics
- Outline of production
- List of international trade topics
- List of business law topics
- List of business theorists
- Actuarial topics
References
- Joel G. Siegel; Jae K. Shim; Stephen Hartman (1 November 1997). Schaum's quick guide to business formulas: 201 decision-making tools for business, finance, and accounting students. McGraw-Hill Professional. ISBN 978-0-07-058031-2. Retrieved 12 November 2011. §39 "Corporate Planning Models". See also, §294 "Simulation Model".
- See for example: Low, R.K.Y.; Faff, R.; Aas, K. (2016). "Enhancing mean–variance portfolio selection by modeling distributional asymmetries" (PDF). Journal of Economics and Business. 85: 49–72. doi:10.1016/j.jeconbus.2016.01.003.; Low, R.K.Y.; Alcock, J.; Faff, R.; Brailsford, T. (2013). "Canonical vine copulas in the context of modern portfolio management: Are they worth it?" (PDF). Journal of Banking & Finance. 37 (8): 3085–3099. doi:10.1016/j.jbankfin.2013.02.036. S2CID 154138333.
External links
- 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
- SECLaw.com - law of the financial markets
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