Why Study Finance
Finance is a broad term that describes two related activities:
- the study of how money is managed
- the actual process of acquiring needed funds
It encompasses the oversight, creation and study of money, banking, credit, investments, assets
and liabilities that make up financial systems. However, research shows that poor financial literacy and money mismanagement have a particularly insidious economic effect. For instance, elevated household debt levels were among the causes of the last recession.
There is a need for more young people who have a deep understanding of finance, such as:
- Need for an in-depth understanding of how financial markets work
- Households must take fundamental financial decisions
- Buy/rent a house
- How much to consume
- Where to invest
- Plan for retirement
- Corporations must take fundamental financial decisions
- Invest in R&D
- Acquire another firm
- How much capital to raise
- Financial markets allow taking these decisions in the best way
