Be familiar with recent and relevant concepts surrounding the study of finance, and as may be discussed in a Masters in Finance Programs.
Not everybody understands how a business runs its finances and how money behaves. These are corporate concepts and basic essentials that may only be truly understood by individuals who have been trained in Finance. A Masters in Finance is a post-university degree that provides high-level education, allowing a finance student to immerse more deeply in the world of finance than what he or she has been taught in the university.
Finance is a branch of economics that focuses on the proper acquisition, use, distribution and management of an individual or corporation’s resources. A Master in Finance prepares an individual for a career that involves money – how to earn, use and handle well. The finance professional takes on job positions as finance specialist, financial analyst, economic manager, investment adviser, and others, as well as the ultimate title as CFO (chief finance officer).
The finance specialist is the most qualified and educated person in an organization to analyze financial status and recommend financial policies and activities. He or she aids management in making important corporate decisions using financial information, assessments and proposals. The finance officer is highly educated on the different concepts in Finance.
One of these finance concepts involves the coming together of Finance and Economics, thus Financial Economics. This is a branch of economics that does not directly study the economy, rather its variables, such as interest rates, prices, and shares. It also does not purely deal with finance but more on how economic variables affect financial variables.
Financial economics also focuses on financial markets and how to make the right decisions when there is uncertainty in the market. It also studies investors and how they make sound decisions and investments following different theories and models in finance. Thus, it focuses on understanding rationality in an uncertain financial environment.
Another important concept is financial mathematics. This is basically a branch of mathematics that is concerned with the financial markets. It is an extension of financial economics as it creates real-life applications for the numerical models of financial economics.
A third concept or focus is behavioral finance. Since behavioral sciences attempt to explain why people think, act and behave the way they do, in like manner, behavioral finance studies the behaviors of investors and financial managers. It hopes to understand how financial decisions are made and how people react to the market.
This is a growing finance theory that attempts to create models in order to demonstrate how psychology can affect prices, trading and other finance activities. It makes use of empirical studies to prove if there are significant deviations from traditional finance theories. This theory believes that a study of behaviors can somehow predict future market tendencies.
Finally, experimental finance is also gaining importance and attention from finance professionals. Experimental finance creates market-like settings and performs experimentation in order to observe trading behaviors and probabilities. The experiments also hope to better understand price setting mechanisms, trading flows, information diffusion, and returns.
These concepts and principles need expertise in the part of the professional. These are deep and high-level concepts that only the truly gifted finance professional can truly grasp. Much of the learning and expertise is established upon studying for a Masters in Finance degree.