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Khaled Husari

What the cornerstones of finance are

Greeting,
4 years ago I found myself working for a big bank inside the financial control department, my bachelor degree wasn’t in finance or accounting actually it was in Management.
Meantime I’m enrolled in a master program (Applied finance and banking) completed 5 subject out of 10 with acceptable results; however and as a result of not having any previous studies in finance I’m facing a huge difficulties while I am trying to fully understand the basics of finance each time I am in need to because in master all the subjects are in advanced level.

It would be highly appreciated if anyone is able to help me by simply telling me what are the most and must be learned basics in finance … where to start from what are the steps … what the cornerstones of finance are!

Regards

Tags: finance

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Off hand, I will count

1. Time value of money - a rupee today is more valuable than a rupee tomorrow - a lot of modern finance is concerned with how much more?
2. value of an asset is the present value of teh cash flows associated with owning that asset
3. Risk aversion of investors - people generally prefer less risky investments and demand a compensation (in terms of higher returns) if asked to accept more risky investments
4. Risk be measured in terms of variability of teh outcome - jumping from 100th floor has not uncertainty - the outcome (death) is certain and hence there is no risk in the lingo of finance. Jumping from 3rd floor is risky - one can come unscathed, one can have minor injuries, one can have multiple fractures, one can live with permanent disability, one can die
5. Market efficiency (not efficient all the time)

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