Outline of finance#Insurance
{{short description|Overview of finance and finance-related topics}}
{{Finance sidebar}}
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.
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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
- Real estate
- Securities
- Commodities
- Futures
- Cash
- Discounted cash flow
- Financial capital
- Funding
- Entrepreneur
- Entrepreneurship
- Fixed income analysis
- Gap financing
- Global financial system
- Hedge
- Basis risk
- Interest rate
- Risk-free interest rate
- Term structure of interest rates
- Short-rate model
- Vasicek model
- Cox–Ingersoll–Ross model
- Hull–White model
- Chen model
- Black–Derman–Toy model
- Interest
- Effective interest rate
- Nominal interest rate
- Interest rate basis
- Fisher equation
- Crowding out
- Annual percentage rate
- Interest coverage ratio
- 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
- Money creation
- Currency
- Coin
- Banknote
- Counterfeit
- History of money
- Monetary reform
- 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
- Day trading
- 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
- Free trade
- Free market
- Fair trade
- Unit of account
- Volatility
- Yield
- Yield curve
- Equated monthly installment
- Down payment
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
- 1997 Asian financial crisis
- Dot-com bubble 1995-2001
- Stock market downturn of 2002
- United States housing bubble
- 2008 financial crisis and the Great Recession
Finance terms by field
= Accounting (financial record keeping) =
{{main article|Accountancy|l1=Accounting|List of accounting topics}}
= Banking =
- See articles listed under: {{slink|Bank|See also}}
= Corporate finance =
{{Main article|Corporate finance}}
{{See also|Financial management|#Corporate finance theory}}
{{Further|Outline of corporate finance}}
- Balance sheet analysis
- Financial ratio
- 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
- Corporate action
- (Strategic) Financial management
- Capital management
- Capital budgeting
- Working capital
- Current assets
- Current liabilities
- Managerial finance
- Management accounting
- Mergers and acquisitions
- Leveraged buyout
- Takeover
- Corporate raid
- Contingent value rights
- Real options
- Return on investment
- Return on capital
- Return on assets
- Return on equity
- Loan covenant
- Cash conversion cycle
- Cash management
- {{slink|Strategic financial management|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 ===
{{main article|Investment management}}
{{See also|#Portfolio theory}}
- Active management
- Efficient market hypothesis
- Portfolio
- Modern portfolio theory
- Capital asset pricing model
- Arbitrage pricing theory
- Passive management
- Index fund
- Activist shareholder
- Mutual fund
- Open-end fund
- Closed-end fund
- Financial engineering
- Long-Term Capital Management
- Hedge fund
- Hedge
- #Quantitative investing, below
= Personal finance =
{{main article|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
- Commission
- Employee stock option
- Employee or fringe benefit
- Health insurance
- Paycheck
- Salary
- Wage
- Financial literacy
- Insurance
- Predatory lending
- Retirement plan
- Australia – Superannuation in Australia
- Canada
- Registered retirement savings plan
- Tax-free savings account
- Japan – Nippon individual savings account
- New Zealand – KiwiSaver
- United Kingdom
- Individual savings account
- Self-invested personal pension
- 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 =
{{main article|Public finance}}
- Central bank
- Federal Reserve
- Fractional-reserve banking
- Deposit creation multiplier
- 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 =
{{main|Financial risk management}}
{{also|Finance#Risk management|Risk management #Finance}}
- 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)
- Discounted maximum loss
- 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
- Interest rate risk in the banking book
- Insurance
- Investment risk
- Irrational exuberance
- Kelly criterion
- Liquidity risk
- Market risk
- Operational risk
- Risk accounting
- 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
- Volatility risk
- Volume risk
- Wrong way risk
= Constraint finance =
Insurance
{{main article|Insurance}}
- Actuarial science
- Annuities
- Catastrophe modeling
- Earthquake loss
- Extended coverage
- {{slink|Financial risk management#Insurance}}
- Insurable interest
- Insurable risk
- Insurance
- Health insurance
- Disability insurance
- Accident insurance
- Flexible spending account
- Health savings account
- Long term care insurance
- Medical savings account
- Life insurance
- Life insurance tax shelter
- Permanent life insurance
- Term life insurance
- Universal life insurance
- Variable universal life insurance
- Whole life insurance
- Property insurance
- Auto insurance
- Boiler insurance
- Business interruption insurance
- Condo insurance
- Earthquake insurance
- Home insurance
- Title insurance
- Pet insurance
- Renters' insurance
- Casualty insurance
- Fidelity bond
- Liability insurance
- Political risk insurance
- Surety bond
- Terrorism insurance
- Credit insurance
- Trade credit insurance
- Payment protection insurance
- Credit derivative
- Mid-term adjustment
- Reinsurance
- Self insurance
- Travel insurance
- Niche insurance
- Insurance contract
- Loss payee clause
- Risk Retention Group
Economics and finance
{{main article|Financial economics|Asset pricing}}
{{see also|Finance#Financial theory}}
= Corporate finance theory =
{{further|Financial economics#Corporate finance theory|Financial economics#Certainty}}
{{see also|Outline of corporate finance#Theory}}
- Fisher separation theorem
- Modigliani–Miller theorem
- Theory of the firm
- The Theory of Investment Value
- Agency theory
- Managerial finance
- Capital structure
- {{slink|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
- {{slink|Corporate finance|Dividend policy}}
- Walter model
- Gordon model
- Lintner model
- Residuals theory
- Signaling hypothesis
- Clientele effect
- Dividend puzzle
- {{slink|Treasury stock|Buying back shares}}
- Dividend tax
- Capital budgeting (valuation)
- {{slink|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
- {{slink|Corporate finance|Financial risk management}}
- {{slink|Financial risk management|Corporate finance}}
- Hedging irrelevance proposition
- Risk modeling
- Risk-adjusted return on capital
= Asset pricing theory =
{{main|Asset pricing}}
{{further|Financial economics#Underlying economics}}
- Value (economics)
- Fair value
- Intrinsic value
- Market price
- Expected value
- Opportunity cost
- Risk premium
- #Underlying theory below
- Financial markets
- Stylized fact
- Regulatory economics
- {{slink|Macroprudential regulation|Theoretical rationale}}
- 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
- {{slink|Agent-based model|In economics and social sciences}}
- Artificial financial market
- General equilibrium theory
- Supply and demand
- Competitive equilibrium
- Economic equilibrium
- Partial equilibrium
- Equilibrium price
- Market efficiency
- Economic equilibrium
- Rational expectations
- Risk factor (finance)
- Arbitrage-free price
- Rational pricing
- § Arbitrage free pricing
- § Risk neutral valuation
- 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:
- {{slink|Arrow–Debreu model|Economics of uncertainty: insurance and finance}}
- {{slink|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
- 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
- LIBOR market model
Mathematics and finance
= Time value of money =
{{main article|Time value of money}}
= Financial mathematics =
{{main article|Financial mathematics}}
== Mathematical tools ==
- Probability
- Probability distribution
- Binomial distribution
- Log-normal distribution
- Poisson distribution
- Stochastic calculus
- Brownian motion
- Geometric Brownian motion
- Cameron–Martin theorem
- Feynman–Kac formula
- Girsanov's theorem
- Itô's lemma
- Martingale representation theorem
- Radon–Nikodym derivative
- Stochastic differential equations
- Stochastic process
- Jump process
- Lévy process
- Markov process
- Ornstein–Uhlenbeck process
- Wiener process
- Monte Carlo methods
- Low-discrepancy sequence
- Monte Carlo integration
- Quasi-Monte Carlo method
- Random number generation
- Partial differential equations
- Finite difference method
- Heat equation
- Numerical partial differential equations
- Crank–Nicolson method
- Volatility
- ARCH model
- GARCH model
- Stochastic volatility
- Stochastic volatility jump
== Derivatives pricing ==
{{main article|Financial mathematics#Derivatives pricing}}
{{See also|Financial economics#Derivative pricing}}
- Underlying logic (see also #Economics and finance above)
- Rational pricing
- Risk-neutral measure
- Arbitrage-free pricing
- Brownian model of financial markets
- Martingale pricing
- Forward contract
- Forward contract pricing
- Futures
- Futures contract pricing
- 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
- 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
- Implied binomial tree
- Implied trinomial tree
- Edgeworth binomial tree
- Johnson binomial tree
- Swaps
- Swap valuation
- {{section link|Asset swap|Computing the asset swap spread}}
- {{section link|Credit default swap|Pricing and valuation}}
- {{section link|Currency swap|Valuation and pricing}}
- {{section link|Interest rate swap|Valuation and pricing}}
- Multi-curve framework
- {{section link|Variance swap|Pricing and valuation}}
- Interest rate derivatives (bond options, swaptions, caps and floors, and others)
- Black model
- caps and floors
- swaptions
- Bond options
- 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
- Credit valuation adjustment
- XVA
- Yield curve modelling
- Multi-curve framework
- Bootstrapping (finance)
- {{slink|Yield curve|Construction of the full yield curve from market data}}
- {{slink|Fixed-income attribution |Modeling the yield curve}}
- Nelson-Siegel
- {{slink|Principal component analysis|Quantitative finance}}
== Portfolio mathematics ==
- #Mathematical techniques below
- #Quantitative investing below
- {{slink|Modern portfolio theory|Mathematical model}}
- Portfolio optimization
- § Optimization methods
- § Mathematical tools
- 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
{{main|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 =
{{main article|Equity market}}
== Equity valuation ==
{{main article|Equity valuation}}
{{See also|#Context}}
- 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 ==
= Bond market =
= Money market =
{{main article|Money market}}
- Repurchase agreement
- International Money Market
- Currency
- Exchange rate
- International currency codes
- Table of historical exchange rates
= Commodity market =
{{main article|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 =
{{main article|Derivatives market}}
== Forward markets and contracts==
{{main article|Forward market}}
== Futures markets and contracts==
{{main article|Futures market}}
== Option markets and contracts ==
- Options
- Stock option
- Box spread
- Call option
- Put option
- Strike price
- Put–call parity
- The Greeks
- Black–Scholes formula
- Black model
- Binomial options model
- Implied volatility
- Option time value
- Moneyness
- At-the-money
- In-the-money
- Out-of-the-money
- Straddle
- Option style
- Vanilla option
- Exotic option
- Binary option
- European option
- Interest rate floor
- Interest rate cap
- Bermudan option
- American option
- Quanto option
- Asian option
- Employee stock option
- Warrants
- Foreign exchange option
- Interest rate options
- Bond options
- Real options
- Options on futures
== Swap markets and contracts ==
{{main article|Swap market}}
== Derivative markets by underlyings ==
=== Equity derivatives ===
{{main article|Equity derivative}}
=== Interest rate derivatives ===
{{main article|Interest rate derivative}}
- 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 ===
{{main article|Credit derivative}}
=== Foreign exchange derivative ===
Financial regulation
= Designations and accreditation =
{{further|Professional certification in financial services|Professional certification #Accountancy, auditing and finance|#Education}}
- Certified Financial Planner
- Chartered Financial Analyst
- CFA Institute
- Chartered Alternative Investment Analyst
- Professional risk manager
- Chartered Financial Consultant
- Canadian Securities Institute
- Independent financial adviser
- Chartered Insurance Institute
- Financial Risk Manager
- Chartered Market Technician
- Certified Financial Technician
= Litigation =
= Fraud =
= Industry bodies=
= Regulatory bodies =
{{main article|List of financial regulatory authorities by country}}
== International ==
== European Union ==
== Regulatory bodies by country ==
=== United Kingdom ===
=== United States ===
= United States legislation =
Actuarial topics
Valuation
{{hatnote|This section is corporate-finance-focused: for the valuation of derivatives and interest rate instruments see {{slink||Derivatives pricing}}; for the economic theory see {{slink||Asset pricing theory}}.}}
= Underlying theory =
- Value (economics)
- Valuation (finance) and specifically § Valuation overview
- "The Theory of Investment Value"
- {{section link|Financial economics|Corporate finance theory}}
- Valuation risk
- Real versus nominal value (economics)
- Real prices and ideal prices
- Fair value
- Fair value accounting
- Intrinsic value
- Market price
- Value in use
- Fairness opinion
- Asset pricing (see also #Asset pricing theory above)
- Equilibrium price
- market efficiency
- economic equilibrium
- rational expectations
- Arbitrage-free price
- {{section link|Rational pricing|Arbitrage free pricing}}
- {{section link|Rational pricing|Risk neutral valuation}}
= Context =
- (Corporate) Bonds
- Bond valuation
- {{section link|Bond (finance)|Bond valuation}}
- {{section link|Corporate bond|Valuation}}
- Equity valuation
- #Equity valuation above
- Fundamental analysis
- Stock valuation
- Capital Markets
- Business valuation
- {{section link|Equity (finance)|Valuation}}
- {{section link|Intrinsic value (finance)|Equity}}
- Capital budgeting and {{section link|Corporate finance|Investment and project valuation}}
- The Theory of Investment Value
- Real estate valuation
- Real estate appraisal
- Real estate economics
= 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
- Conglomerate discount
- Minority discount
- Control premium
- Accretion/dilution analysis
- Certainty equivalent
- Haircut (finance)
- Paper valuation
= Discounted cash flow valuation =
{{main article|Valuation using discounted cash flows}}
{{Further|Discounted cash flow|Time value of money}}
- Bond valuation
- Modeling
- {{section link|Present value|PV of a bond}}
- {{section link|Bond valuation|Present value approach}}
- {{section link|Bond valuation|Arbitrage-free pricing approach}}
- embedded options:
- Pull to par
- {{section link|Lattice model (finance)|Hybrid securities}}
- Results
- Clean price
- Dirty price
- Yield to maturity
- Coupon yield
- Current yield
- Duration
- Convexity
- embedded options:
- Option-adjusted spread
- effective duration
- effective convexity
- Cash flows
- Principal (finance)
- Coupon (bond)
- Fixed rate bond
- Floating rate note
- Zero-coupon bond
- Accrual bond
- sinking fund provisions
- Real estate valuation
- {{section link|Intrinsic value (finance)|Real estate}}
- Income approach
- Net Operating Income
- {{section link|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
- Free cash flow to firm
- Free cash flow to equity
- Dividends
- {{slink|Valuation using discounted cash flows|Determine cash flow for each forecast period}}
= Relative valuation =
{{main article|Relative valuation}}
- Bonds
- {{section link|Bond valuation|Relative price approach}}
- Yield spread
- I-spread
- Option-adjusted spread
- Z-spread
- Asset swap 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
- {{section link|Real estate appraisal|The 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
- DuPont analysis
- PE ratio
- PEG ratio
- Cyclically adjusted price-to-earnings ratio
- PVGO
- 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 =
{{main article|Contingent claim valuation}}
- Valuation techniques
- general
- Valuation of options
- {{section link|Option (finance)|Valuation}}
- #Derivatives pricing above
- as typically employed
- Real options valuation
- {{section link|Rational pricing|The replicating portfolio}}
- {{section link|Financial economics|Corporate finance theory}}
- {{section link|Lattice model (finance)|Hybrid securities}}
- Monte Carlo methods in finance
- Applications
- Corporate investments and projects
- Real options
- {{section link|Corporate finance|Valuing flexibility}}
- Contingent value rights
- {{section link|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
= 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 =
{{further|Financial modeling#Accounting}}
{{distinguish|Financial modeling#Quantitative finance}}
- Cash flow
- Cash flow forecasting
- Cash flow statement
- Operating cash flow
- EBIDTA
- {{section link|Depreciation|Effect on cash}}
- NOPAT
- Free cash flow
- Free cash flow to firm
- Free cash flow to equity
- Dividends
- Cash is king
- Mid-year adjustment
- Owner earnings
- Required return (i.e. discount rate)
- {{slink|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
- {{section link|Beta (finance)|Empirical estimation}}
- Hamada's equation
- Pure play method
- Arbitrage pricing theory
- {{section link|Business valuation|Build-up method}}
- Total Beta
- T-model
- cash-flow T-model
- Terminal value
- {{slink|Valuation using discounted cash flows|Determine the continuing value}}
- Forecast period (finance)
- long term growth rate
- {{section link|Sustainable growth rate|From a financial perspective}}
- {{section link|Stock valuation|Growth rate}}
- Forecasted financial statements
- Financial forecast
- {{section link|Financial modeling|Accounting}}
- {{section link|Pro forma|Financial statements}}
- Revenue
- Revenue model
- {{section link|Revenue|Financial statement analysis}}
- {{section link|Revenue management|Forecasting}}
- Net sales
- Costs
- Profit margin
- Gross margin
- Net margin
- Cost of goods sold
- 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)
- Shareholders' equity
- Book value
- Retained earnings
- Financial capital
- Long term asset / Fixed asset
- Fixed-asset turnover
- Long-term liabilities
- Debt-to-equity ratio
- Debt-to-capital ratio
- 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)
- Index fund
- Core & Satellite
- Smart beta
- Expense ratio
- Investment style
- Value investing
- Contrarian investing
- Growth investing
- CAN SLIM
- Index investing
- Magic formula investing
- Momentum investing
- Quality investing
- Style investing
- Factor investing
- Investment strategy
- Benchmark-driven investment strategy
- Liability-driven investment strategy
- {{slink|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
- Cyclical tactical asset allocation
- Strategic asset allocation
- Dynamic asset allocation
- Sector rotation
- Correlation & covariance
- Covariance matrix
- Correlation matrix
- Risk-free interest rate
- Leverage (finance)
- Utility function
- Intertemporal portfolio choice
- Portfolio insurance
- Constant proportion portfolio insurance
- {{section link|Mathematical finance|Risk and portfolio management: the P world}}
- Quantitative investment / Quantitative fund (see below)
- Uncompensated risk
= Modern portfolio theory =
{{main article|Modern portfolio theory}}
{{Further|Financial economics#Uncertainty}}
- Portfolio optimization
- Risk return ratio
- Risk–return spectrum
- Economic efficiency
- Efficient-market hypothesis
- Random walk hypothesis
- 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
- {{section link|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 =
{{main article|Post-modern portfolio theory}}
{{Further|Financial economics#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
- Optimization models
- Black–Litterman model
- Universal portfolio algorithm
- Resampled efficient frontier
= Performance measurement =
{{see also|List of financial performance measures}}
- Alpha (finance)
- Beta (finance)
- Performance attribution
- Market timing
- Stock selection
- Fixed-income attribution
- Benchmark (finance)
- Lipper average
- Returns-based style analysis
- Rate of return on a portfolio
- Holding period return
- Tracking error
- Attribution analysis
- Style drift
- Returns-based style analysis
- 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 =
- {{slink|Modern portfolio theory|Mathematical model}}
- Quadratic programming
- Critical line method
- 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 ({{section link|List of genetic algorithm applications|Finance and Economics}})
- Artificial intelligence:
- {{slink|Applications of artificial intelligence#Trading and investment}}
- Machine learning (§ Applications)
- Artificial neural network (§ Finance)
Quantitative investing
{{main article|Quantitative investing}}
- Quantitative investing
- Quantitative fund
- {{section link|Quantitative_analysis_(finance)|Quantitative_investment_management}}
- {{slink|Quantitative analysis (finance)|Algorithmic trading quantitative analyst}}
- {{slink|Applications of artificial intelligence#Trading and investment}}
- Trading:
- Automated trading
- High-frequency trading
- Algorithmic trading
- Program trading
- Systematic trading
- {{section link|Technical_analysis|Systematic_trading}}
- Trading strategy
- Mirror trading
- Copy trading
- Social trading
- VWAP
- TWAP
- Electronic trading platform
- Statistical arbitrage
- Portfolio optimization:
- {{section link|Portfolio optimization |Optimization methods}}
- {{section link|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:
- {{section link|Automated_trading_system|Market_disruption_and_manipulation}}
- {{section link|High-frequency_trading|Risks_and_controversy}}
- {{section link|Algorithmic_trading|Issues_and_developments}}
- {{section link|Positive_feedback|Systemic_risk}}
- 2010 flash crash
- {{section link|Black_Monday_(1987)|Causes}}
- {{section link|Statistical arbitrage |StatArb and systemic risk: events of summer 2007}}
- Leading companies (see {{slink|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
{{more|Business software}}
{{also|List of free and open-source software packages#Finance}}
Financial modeling applications
{{main article|Financial modeling}}
= 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"{{cite book|author1=Joel G. Siegel|author2=Jae K. Shim|author3=Stephen Hartman|title=Schaum's quick guide to business formulas: 201 decision-making tools for business, finance, and accounting students|url=https://books.google.com/books?id=4JpojQPk8YsC|access-date=12 November 2011|date=1 November 1997|publisher=McGraw-Hill Professional|isbn=978-0-07-058031-2}} §39 "Corporate Planning Models". See also, §294 "Simulation Model".)
- 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 optimizationSee for example: {{cite journal|last1=Low|first1=R.K.Y.|last2=Faff|first2=R.|last3=Aas|first3=K.|title=Enhancing mean–variance portfolio selection by modeling distributional asymmetries|journal=Journal of Economics and Business|volume=85|pages=49–72|date=2016|doi=10.1016/j.jeconbus.2016.01.003|url=https://espace.library.uq.edu.au/view/UQ:377912/UQ377912_OA.pdf}}; {{cite journal|last1=Low|first1=R.K.Y.|last2=Alcock|first2=J.|last3=Faff|first3=R.|last4=Brailsford|first4=T.|title=Canonical vine copulas in the context of modern portfolio management: Are they worth it?|journal=Journal of Banking & Finance|date=2013|volume=37|issue=8|pages=3085–3099|doi= 10.1016/j.jbankfin.2013.02.036|s2cid=154138333 |url=https://espace.library.uq.edu.au/view/UQ:297895/EC15UQ297895.pdf}} 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
- List of central banks
- 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
- Building society
- Broker
- Broker-dealer
- Brokerage firm
- Commodity broker
- Insurance broker
- Prime brokerage
- Retail broker
- Stockbroker
- 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
- List of stock exchanges
- 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 {{section link|Financial modeling |Accounting}})
- Quantitative analyst, {{section link|Quantitative analysis (finance) |Education}} and {{section link|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 {{section link|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 {{section link|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 [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2345545 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:
- {{section link|Accounting |Education, training and qualifications}}
- Actuarial credentialing and exams
- Business education
- {{slink|Credit analyst|Education}}
- Economics education
- {{section link|Management |Training and education}}
- {{slink|Chief financial officer|Qualifications}}
See also
Related lists
References
{{reflist}}
External links
{{sister project links|Finance}}
- [http://pages.stern.nyu.edu/~adamodar/ Prof. Aswath Damodaran] – financial theory, with a focus in Corporate Finance, Valuation and Investments. Updated Data, Excel Spreadsheets.
- [http://web.utk.edu/~jwachowi/wacho_world.html Web Sites for Discerning Finance Students] (Prof. John M. Wachowicz) -Links to finance web sites, grouped by topic
- [http://www.studyfinance.com/ studyfinance.com] – introductory finance web site at the University of Arizona
- [http://www.seclaw.com SECLaw.com] – law of the financial markets
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