The following outline provides an overview and topical guide to finance: Finance – the field concerned with how individuals, businesses, and organizations raise, allocate, and manage monetary resources over time, while accounting for the risks associated with their activities and investments.
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 – Academic discipline studying businesses and investments Arbitrage – Capitalisation of risk-free opportunities in financial markets Capital (economics) – Already-produced durable goods that are used in production of goods or services Capital asset pricing model – Finance model linking expected return to systematic risk Cash flow – Movement of money into or out of a business, project, or financial product Cash flow matching – Strategy aligning asset cash inflows with liability outflowsPages displaying short descriptions of redirect targets Debt – Obligation to pay borrowed money Default – Financial failure to meet legal conditions of a loan Consumer debt – Amount owed by individual consumers Debt consolidation – Form of debt refinancing Debt settlement – Settlement negotiated with a debtor's unsecured creditor Credit counseling – Process to help debtors Bankruptcy – Legal status for relief from debts Debt diet – Debt management planPages displaying short descriptions of redirect targets Debt-snowball method – Personal finance strategyPages displaying short descriptions of redirect targets Debt of developing countries Financial ethics – Application of ethical principles to the area of business activitiesPages displaying short descriptions of redirect targets Asset types Real estate – Land, including its buildings and resources Securities – Tradable financial assetPages displaying short descriptions of redirect targets Commodities – Fungible item produced to satisfy wants or needsPages displaying short descriptions of redirect targets Futures – Standardised contract to buy or sell an asset at a future date Cash – Physical currency and other immediately accessible liquid assets Discounted cash flow – Method of valuing a project, company, or asset Financial capital – Economic resources used to buy what is needed to make products or provide services Funding – Act of providing resources Entrepreneur – Person who owns and operates a business Entrepreneurship – Taking financial risks in the hope of profit Fixed income analysis – Process of valuing debt securities by assessing their risk and return Gap financing – Short-term loan covering the gap between available funds and total financing needs Global financial system – Global framework for capital flows Hedge – Investment position used to offset potential losses in another asset Basis risk – Risk that a hedge and its underlying asset do not move perfectly together Interest rate – Percentage of a sum of money charged for its use Risk-free interest rate – Interest rate for zero risk investment Term structure of interest rates – Relationships among bond yields of different maturitiesPages displaying short descriptions of redirect targets Short-rate model – Interest-rate model describing the stochastic evolution of the instantaneous short rate Vasicek model – Mathematical model of interest rates Cox–Ingersoll–Ross model – Stochastic model for the evolution of financial interest rates Hull–White model – Model of future interest rates Chen model – Three-factor short-rate model for interest-rate dynamics Black–Derman–Toy model – Short-rate model in mathematical finance Interest – Sum paid for the use of money Effective interest rate – Precisely defined interest rate Nominal interest rate – Interest rate without adjusting for inflation Interest rate basis – Calculation method for the accrual of interestPages displaying short descriptions of redirect targets Fisher equation – Estimate of future interest rates Crowding out – Reduction in private investment caused by increased government borrowing Annual percentage rate – Interest rate for a whole year Interest coverage ratio, also known as Times interest earned – Ratio measuring a firm's ability to meet its interest paymentsPages displaying short descriptions of redirect targets Investment – Set of actions with the intent of earning profit Foreign direct investment – Cross-border investment giving a foreign investor lasting control of an enterprise Gold as an investment – Use of gold as a store of value and investment asset Over-investing – Investing more in an asset than its market value justifies Leverage – Use of borrowed funds in the purchase of an asset Long (finance) – Position in a financial instrument in which the holder owns a positive amount Liquidity Market liquidity – Finance property of an asset Accounting liquidity – Measure of a debtor's ability to pay their debts as/when they mature Funding liquidity – Ability of a financial institution to meet its payment obligations when due Margin (finance) – Type of financial collateral used to cover credit risk Mark to market – Accounting method valuing assets and liabilities at current market pricesPages displaying short descriptions of redirect targets Market impact – Concept in economics Medium of exchange – Method by which value is transferred between parties Microcredit – Small loans to impoverished borrowers Money – Object or record accepted as payment Money creation – Process by which the money supply of an economic region is increased Currency – Standardization of money Coin – Small, flat and usually round piece of material used as money Banknote – Paper money issued by a bank Counterfeit – Making a copy or imitation which is represented as the original History of money Monetary reform – Movements to amend the financial system Portfolio – Financial term for a collection of investments Modern portfolio theory – Mathematical framework for investment risk Mutual fund separation theorem – Theorem in portfolio theory Post-modern portfolio theory – Portfolio theory Reference rate – Benchmark interest rate used to price loans and financial contracts Return – Finance term; profit on an investmentPages displaying short descriptions of redirect targets Absolute return – One measure of the return of an investment portfolio Investment performance Relative return – Measure of the return on an investment Risk – Possibility of something bad happening Financial risk – Any of various types of risk associated with financing Risk management – Identification, evaluation and control of risks Financial risk management – Protecting economic value by managing risk exposure Uncompensated risk – In investments, level of additional risk Risk measure – Concept in financial mathematics Coherent risk measure – Concept in financial economics Deviation risk measure – Risk metric quantifying variability of returns around their expected value Distortion risk measure – Risk measure derived by applying a distortion function to a loss distribution Spectral risk measure – Coherent risk measure using weighted outcomes based on risk aversion Value at risk – Estimated potential loss for an investment under a given set of conditions Expected shortfall – Risk measure estimating the average loss in the worst tail of the distribution Entropic value at risk – Coherent measure for value at risk Scenario analysis – Futures studies / Futures techniques methodPages displaying short descriptions of redirect targets Short (finance) – Selling unowned financial securities Speculation – Engaging in risky financial transactions Day trading – Buying and selling financial instruments within the same trading day Position trader – Standardised contract to buy or sell an asset at a future datePages displaying short descriptions of redirect targets Spread trade – Type of financial purchase on securities Standard of deferred payment – Debt valuation in economics Store of value – Inflation-resistant asset Time horizon, also known as planning horizon – Planned duration over which an investment or decision is expected to be held Time value of money – Better to receive money now than later Discounting – When a creditor delays payments from a debtor in exchange for a fee Present value (PV), also known as Present Discounted Value (PDV) – Current worth of a future sum discounted to today Future value – Value of an asset at a specific date Net present value – Valuation in finance Internal rate of return – Method of calculating an investment's rate of return Modified internal rate of return – Measure of an investment's attractivenessPages displaying short descriptions of redirect targets Annuity – Series of payments made at equal intervalsPages displaying short descriptions of redirect targets Perpetuity – Annuity with payments made at equal intervals indefinitely Trade – Exchange of goods and services Free trade – Absence of government restriction on international trade Free market – Form of market-based economy Fair trade – Sustainable and equitable trade Unit of account – Standard numerical measure used to value and compare goods and services Volatility – Degree of variation of a trading price series over time Yield – Income return on an investment expressed as a percentage of its valuePages displaying short descriptions of redirect targets Yield curve – Relationships among bond yields of different maturities Equated monthly installment – Loan repayment variant Down payment – Upfront partial payment for the purchase of something expensive Financial technology
History History of finance – Academic discipline studying businesses and investmentsPages displaying short descriptions of redirect targets History of banking – Development of banking institutions and practices from antiquity to the present History of insurance – Development of insurance practices and institutions from antiquity to the present Stock market bubble – Economic bubble in a stock market Tulip mania – 17th-century economic bubble in the Netherlands South Sea Bubble – 18th‑century British company involved in a major financial scandal Mississippi Company – French joint-stock companyPages displaying short descriptions of redirect targets Railway Mania – Speculative frenzy in the UK in the 1840s about railways Dot-com bubble – Tech stock speculative craze, c. 1995–2003 United States housing bubble – Economic bubblePages displaying short descriptions of redirect targets Vix pervenit – 1745 encyclical by Pope Benedict XIV , on usury and other dishonest profit Panic of 1837 – 19th-century United States financial crisis Erie War – 19th-century Wall-Street battle for control of the Erie Railroad Long Depression – Worldwide economic recession from 1873 to 1879 Post-World War I hyperinflation; see Hyperinflation – Rapidly accelerating inflation Inflation in the Weimar Republic – Period of extreme inflation in Germany during 1921–1923Pages displaying short descriptions of redirect targets Wall Street Crash of 1929 – Major stock market crash in the United StatesPages displaying short descriptions of redirect targets Great Depression – Worldwide economic depression (1929–1939) Bretton Woods Accord – Financial-economic agreement reached in 1944Pages displaying short descriptions of redirect targets 1973 oil crisis – OAPEC petroleum embargo 1979 energy crisis – Worldwide increase in crude oil prices following the Iranian RevolutionPages displaying short descriptions of redirect targets Savings and Loan Crisis – US financial crisis from 1986 to 1995Pages displaying short descriptions of redirect targets Black Monday – Global stock market crash 1997 Asian financial crisis – Regional financial crisis that struck East and Southeast Asia in 1997–1998 Stock market downturn of 2002 – Downturn in international stock prices 2008 financial crisis – Worldwide economic crisis Great Recession – 2007–2009 international economic decline
Finance terms by field
Accounting (financial record keeping)
Auditing – Independent examination of an organizationPages displaying short descriptions of redirect targets Accounting software – Computer program that maintains account books Bookkeeping – Recording financial transactions or events FASB – Private US organization for accountingPages displaying short descriptions of redirect targets Financial accountancy – Field of accountingPages displaying short descriptions of redirect targets Financial statements – Formal record of financial activitiesPages displaying short descriptions of redirect targets Balance sheet – Accounting financial summary Cash flow statement – Financial statement Income statement – Type of financial statement Management accounting – Field of business administration, part of the internal accounting system of a company Philosophy of accounting – Conceptual framework Hedge accounting – Accounting method aligning hedging gains and losses with the hedged item IFRS 9 – Accounting standard Fair value accounting – Accounting method valuing assets and liabilities at current market pricesPages displaying short descriptions of redirect targets
Banking See articles listed under: Bank § See also
Corporate finance
Below § Corporate finance theory Introduction to business: The most widely used and accessible textbook for Introduction to Business courses globally is "Introduction to Business" by OpenStax. Other popular standard textbooks include "Introduction to Business" by Jeff Madura and "Introduction to Business" by Neck, Neck, and Murray. Balance sheet analysis – Accounting financial summaryPages displaying short descriptions of redirect targets Financial ratio – Numerical value to determine the financial condition of a company Business plan – Formal written document containing the goals of a business Investment committee – Head of investments in an organizationPages displaying short descriptions of redirect targets Business valuation – Determination of the economic value of a business Stock valuation – Method of calculating theoretical values of companies and their stocks Fundamental analysis – Analysis of a business's financial statements, health, and market Real option – Capital budgeting analysis termPages displaying short descriptions of redirect targets Valuation topics – Overview of finance and finance-related topicsPages displaying short descriptions of redirect targets Fisher separation theorem – Firm"s investment decision is independent of its owners' consumption preferences Sources of financing – Mix of funds used to start and sustain a business Securities – Tradable financial assetPages displaying short descriptions of redirect targets Debt – Obligation to pay borrowed money Initial public offering – Type of securities offering in which a private company goes public Capital structure – Mix of funds used to start and sustain a business Cost of capital – Cost of a company's funds Weighted average cost of capital – Concept in economics Modigliani–Miller theorem – Economic theory about capital structure Hamada's equation – Corporate finance equation on separating risk Dividend policy – Policies in finance Dividend – Payment made by a corporation to its shareholders Dividend tax – Tax levied on stock earnings Dividend yield – Financial ratio of dividends to share price Modigliani–Miller theorem – Economic theory about capital structure Corporate action – Event initiated by a public company (Strategic) Financial management Capital management – Management of capital assets and investments Capital budgeting – How an organization allocates its cash and resources Working capital – Difference between a firm's assets and liabilities used to fund day-to-day operations Current assets – Economic resource, from which future economic benefits are expectedPages displaying short descriptions of redirect targets Current liabilities – Liabilities of the business that are to be settled in cashPages displaying short descriptions of redirect targets Managerial finance – Application of financial principles to managerial decision-making Management accounting – Field of business administration, part of the internal accounting system of a company Mergers and acquisitions – Processes through which companies combine or transfer ownership Leveraged buyout – Acquisition of a company using a significant proportion of borrowed money Takeover – Purchase of a company by another company Corporate raid – Company acquisition strategy Contingent value rights – Buyer's rights in corporate finance Real option – Capital budgeting analysis termPages displaying short descriptions of redirect targets Return on investment – Ratio between net income and investment Return on capital – Measure of profitability relative to invested capital Return on assets – Measure of how profitable a company's assets are in generating revenue Return on equity – Measure of the profitability of a business Loan covenant – Condition in a commercial loan or bond agreement Cash conversion cycle – Length of time it takes a company to convert resource inputs to cash flows Cash management – Measures of managing short-term cash in the company Strategic financial management § Cash management Inventory optimization – Business practice for improving location and size of inventory storage Supply chain management – Management of the flow of goods and services Just In Time (JIT) – Methodology used to improve productionPages displaying short descriptions of redirect targets Economic order quantity (EOQ), also known as Optimum Batch Quantity – Production scheduling model Economic production quantity (EPQ) – Model in inventory management Economic batch quantity – Model for determining the optimal production batch size Credit (finance) – Financial term for the trust between parties in transactions with a deferred paymentPages displaying short descriptions of redirect targets Credit scoring – Numerical expression representing a person's creditworthinessPages displaying short descriptions of redirect targets Default risk – Risk that a borrower or counterparty fails to meet financial obligationsPages displaying short descriptions of redirect targets Discounts and allowances – Reductions applied to the basic sale price of goods or services Factoring (trade) – Financial transaction and a type of debtor financePages displaying short descriptions of redirect targets Supply chain finance, also known as supplier finance or reverse factoring – Financing methods that optimize cash flow across buyer–supplier relationships Corporate budget – Balance sheet or statement of estimated receipts and expendituresPages displaying short descriptions of redirect targets
Investment management
Active management – Investment approach where managers actively select and adjust portfolio holdings Efficient-market hypothesis – Economic theory that asset prices fully reflect all available information Portfolio – Financial term for a collection of investments Modern portfolio theory – Mathematical framework for investment risk Capital asset pricing model – Finance model linking expected return to systematic risk Arbitrage pricing theory – Asset pricing theory Passive management – Market-weighted investing strategy Index fund – Type of mutual fund or exchange-traded fund Activist shareholder – Shareholder using equity to pressure managementPages displaying short descriptions of redirect targets Mutual fund – Professionally managed investment fund Open-end fund – Collective investment scheme Closed-end fund – Professionally managed investment fund Financial engineering – Application of mathematical and computational practices in finance Long-Term Capital Management – Defunct American hedge fund Hedge fund – Privately pooled investment fund using diverse strategies to seek high returns Hedge – Investment position used to offset potential losses in another asset Quantitative investing – Use of mathematical and statistical methods in financePages displaying short descriptions of redirect targets
Personal finance
529 plan – United States savings program for educational expenses ABLE account – U.S. savings program for individuals with disabilities Asset allocation – Investment strategy Asset location Budget – Balance sheet or statement of estimated receipts and expenditures Coverdell Education Savings Account – US tax advantaged investment accountPages displaying short descriptions of redirect targets Credit and debt Credit card – Card for financial transactions on credit Debt consolidation – Form of debt refinancing Mortgage loan – Loan secured using real estatePages displaying short descriptions of redirect targets Continuous-repayment mortgage – Mortgage repaid through continuous or near-continuous amortisation Debit card – Card used for financial transactions Direct deposit – Deposit of money by a payer into a payee's account Employment contract – Kind of contract in labour law Commission – Form of variable-pay remuneration for services rendered or products sold Employee stock option – Option for employee to share in company stock Employee or fringe benefit – Non-wage compensation provided to employees in addition to normal wages or salariesPages displaying short descriptions of redirect targets Health insurance – Insurance covering health-related expenses Paycheck – Record of money paid or due to employees Salary – Form of periodic payment from an employer to an employee Wage – Payment by an employer to an employee for labour Financial literacy – Ability to make informed choices about money Insurance – Protection from financial loss Predatory lending – Unethical lending practices Retirement plan – Retirement fundPages displaying short descriptions of redirect targets Superannuation in Australia – Retirement pension benefit funds Canada Registered retirement savings plan – Canadian financial account for savings and investment assets Tax-free savings account – Registered tax free savings plan for Canadians Nippon individual savings account – Japanese retail investment account KiwiSaver – New Zealand savings scheme United Kingdom Individual savings account – Class of retail investment arrangement Self-invested personal pension – Type of UK government-approved personal pension scheme United States 401(a) – Tax-deferred retirement savings plan 401(k) – Type of U.S. retirement/pension plan 403(b) – Type of retirement/pension plan in the United States 457 plan – Type of retirement plan in the United States Keogh plan – Type of pension plan in the U.S Individual retirement account – Form of individual retirement plan Roth IRA – Individual retirement account Traditional IRA – Type of individual retirement arrangement SEP IRA – Type of retirement pension account used in the United StatesPages displaying short descriptions of redirect targets SIMPLE IRA – Type of retirement plan in United States Pension – Retirement fund Simple living – Simplified, minimalistic lifestyle Social security – Means-oriented social benefitPages displaying short descriptions of redirect targets Tax advantage – Financial incentive Wealth – Abundance of financial assets or possessions Comparison of accounting software Personal financial management – Managing ones own personal finances Investment club – Group of people who pool their money to make investments Collective investment scheme – Way of investing money alongside other investorsPages displaying short descriptions of redirect targets
Public finance
Central bank – Government body that manages currency and monetary policy Federal Reserve – Central banking system of the US Fractional-reserve banking – Banking system where institutions hold only a fraction of deposits as reserves Deposit creation multiplier – Process by which the money supply of an economic region is increasedPages displaying short descriptions of redirect targets Tax – Compulsory contribution to state revenue Capital gains tax – Tax on investment profits Estate tax – Tax paid after inheritance of propertyPages displaying short descriptions of redirect targets inheritance tax – Tax paid after inheritance of property Gift tax – Tax on money or property that one living person gives to another Income tax – Tax based on taxable income Inheritance tax – Tax paid after inheritance of property Payroll tax – Tax imposed on employers or employees Property tax – Tax on property, particularly real estate land value tax – Levy on the unimproved value of land Sales tax – Tax on the sales of certain goods and services value added tax – Form of consumption taxPages displaying short descriptions of redirect targets excise tax – Goods tax levied at the moment of manufacture rather than salePages displaying short descriptions of redirect targets use tax – Type of tax in the United States Transfer tax – Tax on the transfer of property or assets between parties stamp duty – Tax levied on property purchases or documents Tax advantage – Financial incentive Tax, tariff and trade – Compulsory contribution to state revenuePages displaying short descriptions of redirect targets Tax amortization benefit – Savings resulting from amortization Crowding out – Reduction in private investment caused by increased government borrowing Industrial policy – Government strategy promoting industrial development Agricultural policy – Laws relating to domestic agriculture and foreign-imported agricultural products Currency union – Agreement involving states sharing a single currency Monetary reform – Movements to amend the financial system
Risk management
Asset and liability management – Framework for managing risks arising from mismatches between assets and liabilities Asset–liability mismatch – Mismatch between the timing or sensitivity of a firm's assets and liabilities Capital Requirements Regulation 2013 – EU banking law Credit Institutions Directive 2013 Capital Requirements Directives – EU prudential capital and supervision rules for banks and investment firms Cash flow hedge – Accounting method aligning hedging gains and losses with the hedged itemPages displaying short descriptions of redirect targets Cash management – Measures of managing short-term cash in the company Corporate governance – Mechanisms, processes and relations by which corporations are controlled and operated Climate-related asset stranding – Former physical asset, now a liability Credit risk – Risk that a borrower or counterparty fails to meet financial obligations Default (finance) – Financial failure to meet legal conditions of a loan Discounted maximum loss – Measure of worst-case loss discounted to present value Downside risk – Risk of the actual return being below the expected return Upside risk Duration gap – Financial institutions duration gap Enterprise risk management – Business methods and processes Financial engineering – Application of mathematical and computational practices in finance Financial risk – Any of various types of risk associated with financing Financial risk management – Protecting economic value by managing risk exposure Foreign exchange hedge – Method used to eliminate foreign exchange risk Fuel price risk management – Strategies used to reduce financial exposure to fuel-price volatility Gordon–Loeb model – Method for optimizing information security investments Interest rate risk – Financial loss due to interest rate changes Interest rate risk in the banking book – Banking regulation frameworkPages displaying short descriptions of redirect targets Insurance – Protection from financial loss Investment risk – Any of various types of risk associated with financingPages displaying short descriptions of redirect targets Irrational exuberance – Unfounded market optimism that lacks fundamental valuation Kelly criterion – Bet sizing formula for long-term growth Liquidity risk – Type of financial risk Market risk – Risks arising from movements in market variables Operational risk – Risk of disrupting business operations Risk accounting – Extensive subject of Management accounting Risk adjusted return on capital – Profitability measurement frameworkPages displaying short descriptions of redirect targets Risk aversion – Economics theory Risk-based internal audit – Internal audit approach that prioritises areas with higher organisational risk Risk measure – Concept in financial mathematics Coherent risk measure – Concept in financial economics Deviation risk measure – Risk metric quantifying variability of returns around their expected value Distortion risk measure – Risk measure derived by applying a distortion function to a loss distribution Spectral risk measure – Coherent risk measure using weighted outcomes based on risk aversion Risk modeling – Modelling financial risksPages displaying short descriptions of redirect targets Risk of ruin – Concept in gambling, insurance, and finance Risk pool – Insurance risk management sharing liability Risk register – Document used as risk management tool, acting as a repository for all identified risks Risk return ratio – Mathematical ratio used in investing Risk–return spectrum – Tradeoff between investment return and risk Security management – Computer security procedure Settlement risk – Risk that a party fails to deliver Shadow banking system – Non-banks that provide services similar to banks Specific risk – Risk affecting a particular asset or company, reducible through diversification St. Petersburg paradox – Paradox involving a game with repeated coin flipping Systematic risk – Vulnerability to significant events that affect aggregate outcomes Three lines of defence – Independent, objective assurance and consulting activityPages displaying short descriptions of redirect targets Treasury management – Management of an enterprise's holdings and liquidity to mitigate risk Uncompensated risk – In investments, level of additional risk Valuation risk – Risk that financial assets are misstated due to uncertain or unreliable valuations Value at risk – Estimated potential loss for an investment under a given set of conditions Computation Historical simulation (finance) – Risk-measurement method that estimates losses using past market data Monte Carlo – Probabilistic measurement methods variance-covariance – Estimated potential loss for an investment under a given set of conditions Greeks (finance) – Model parameters in mathematical finance Alternate measures Entropic value at risk – Coherent measure for value at risk Expected shortfall, also known as Conditional value-at-risk – Risk measure estimating the average loss in the worst tail of the distribution Tail value at risk (TVaR), also known as Tail Conditional Expectation – Risk measure estimating the average loss in the worst tail of the distributionPages displaying short descriptions of redirect targets Extensions Profit at risk – Measure estimating the potential decline in profit under adverse market conditions Margin at risk – Measure estimating potential margin shortfalls under adverse market moves Liquidity at risk – Measure of potential liquidity shortfall in a financial portfolio Earnings at risk (EaR), also known as Cash flow at risk – Estimate of the potential impact of market movements on a firm's earnings Liquidity-adjusted VaR – Type of financial risk Volatility risk – Risk arising from changes in market volatility affecting the value of financial positions Volume risk – Risk that changes in transaction or production volumes will affect financial outcomes Wrong way risk – Risk that exposure to a counterparty increases as their credit quality deteriorates
Constraint finance Environmental finance – Field of finance focused on environmental policy Feminist economics – Gender-aware branch of economics Green economics – Economy based on ecological economicsPages displaying short descriptions of redirect targets Islamic economics – Handling of economics based on Islamic jurisprudence Uneconomic growth – Economic growth that reflects or creates a decline in the quality of life Value of Earth – Economical estimate of the net worth of the planet Value of life – Economic measure placing a monetary value on reducing the risk of deathPages displaying short descriptions of redirect targets
Insurance
Actuarial science – Statistics applied to risk in insurance and other financial products Annuities – Series of payments at fixed intervalsPages displaying short descriptions of redirect targets Catastrophe modeling – Computer-assisted risk analysis Earthquake loss – Form of property insurancePages displaying short descriptions of redirect targets Extended coverage – Insurance for additional risks Financial risk management § Insurance Insurable interest – Legal requirement that a policyholder would suffer a loss from the insured event Insurable risk – Conditions under which a risk can be covered by insurancePages displaying short descriptions of redirect targets Insurance – Protection from financial loss Health insurance – Insurance covering health-related expenses Disability insurance – Insurance providing income protection when a disability prevents a person from working Accident insurance – Insurance that pays benefits for injuries or death caused by accidental events Flexible spending account – Tax-advantaged financial accounts in the US Health savings account – American tax-advantaged medical savings account Long term care insurance – Insurance which pays monthly for nursing home or assisted-living carePages displaying short descriptions of redirect targets Medical savings account – Bank holding limiting deposit use to health expenses Life insurance – Insurance that pays benefits upon the policyholder's death Life insurance tax shelter – Use of life insurance to defer or reduce taxes Term life insurance – Life insurance providing coverage for a fixed period with no cash-value component Universal life insurance – Cash value life insurance in the US Variable universal life insurance – Life insurance combining flexible premiums with investment-linked cash-value accounts Whole life insurance – Permanent life insurance with fixed premiums and guaranteed cash-value accumulation Property insurance – Insurance that protects against most risks to property Auto insurance – Insurance for road vehiclesPages displaying short descriptions of redirect targets Boiler insurance – Insurance covering boilers Business interruption insurance – Insurance that covers lost income when normal business operations are disrupted Earthquake insurance – Form of property insurance Home insurance, also known as Condo insurance – Type of property insurance that covers a private residence Title insurance – Form of indemnity insurance Pet insurance – Insurance that reimburses veterinary costs Renters' insurance – Insurance policy for a tenant's personal property and liability Casualty insurance – Insurance not directly concerned with life, health, or property insurance Fidelity bond – Insurance against others' frauds Liability insurance – Insurance that covers legal liability for injury, damage, or loss caused to others Political risk insurance – Insurance that protects investments against losses from political or sovereign actions War risk insurance – Insurance that covers losses arising from war, terrorism, or other hostile acts Surety bond – Promise to assume responsibility for defaulted debtPages displaying short descriptions of redirect targets Terrorism insurance – Financial coverage against terrorist attacks Credit insurance Trade credit insurance – Insurance protecting businesses against losses from customer non-payment of trade debts Payment protection insurance – Covers loan repayments if borrower cannot pay due to illness, unemployment, or death Credit derivative – Financial contract that transfers the credit risk of a borrower between parties Mid-term adjustment – Change to an insurance policy's terms, cover, or premium made during the policy period Reinsurance – Insurance purchased by an insurance company Self insurance – Bearing risk that is usually outsourcedPages displaying short descriptions of redirect targets Travel insurance – Insurance that covers financial losses from events during travel Niche insurance – Insurance for small, low-demand areas Insurance contract – Contract between the insurer and the insuredPages displaying short descriptions of redirect targets Loss payee clause – Clause directing insurance claim payments to a third-party interest Risk Retention Group – Member-owned US liability insurance group formed under the Liability Risk Retention ActPages displaying short descriptions of redirect targets
Economics and finance
Finance-related areas of economics Financial economics – Academic discipline concerned with the exchange of money Financial econometrics – Method to financial market data Monetary economics – Branch of economics covering theories of money Mathematical economics – Branch of applied mathematics Managerial economics – Application of economics in a business Economic growth – Measure of increase in market value of goods Decision theory – Branch of applied probability theory Game theory – Mathematical models of strategic interactions Experimental economics – Method used to study economic questions Experimental finance – Field using controlled experiments to study financial behaviour and market dynamics Behavioral economics – Factors influencing economic decisions Behavioral finance – How psychological biases shape investor behaviour and financial marketsPages displaying short descriptions of redirect targets
Corporate finance theory
Fisher separation theorem – Firm"s investment decision is independent of its owners' consumption preferences Modigliani–Miller theorem – Economic theory about capital structure Theory of the firm – Theories relating to firms' roles in the economy The Theory of Investment Value, book by John Burr Williams Agency theory – Conflict of interest when one person acts on another's behalfPages displaying short descriptions of redirect targets Agency costs – Costs arising from conflicts of interest between principals and their agentsPages displaying short descriptions of redirect targets Contract theory – Economic analysis of contracts Managerial finance – Application of financial principles to managerial decision-making Capital structure – Mix of funds used to start and sustain a business Corporate finance § Capitalization structure Capital structure substitution theory – Theory proposing that managers adjust capital structure to maximize earnings per share Pecking order theory – Theory that firms prefer internal funds, then debt, and use equity last Market timing hypothesis – Hypothesis that firms adjust financing decisions to exploit favourable market conditions Trade-off theory of capital structure – Financial concept Merton model – Model that values credit risk using option-based default mechanics Tax shield – Reduction in taxable income achieved through allowable deductible expenses Dividend policy – Policies in finance Corporate finance § Dividend policy Walter model – Policies in finance Gordon model – Valuation model that prices a stock by discounting expected future dividendsPages displaying short descriptions of redirect targets Lintner model – American economist (1916–1983) Residuals theory – Policies in finance Signaling hypothesis – Policies in finance Clientele effect – Investor shifts caused by policy changes that attract different investor groups Dividend puzzle – Why firms pay dividends despite theories predicting investor indifference Treasury stock § Buying back shares Dividend tax – Tax levied on stock earnings Capital budgeting – How an organization allocates its cash and resources Corporate finance § Investment and project valuation Clean surplus accounting – Valuing firms by changes in book value excluding shareholder transactions Residual income valuation – Equity valuation method based on the present value of future residual income Economic va