Updated: Jul 10, 2022
Feh-Nance: The academic pronunciation of Finance.
Finance is the application of economic theory on the study of the flow and management of money and assets by governments, corporations, and individuals. It focuses on the decision making process of investors using fundamental concepts such as time value of money, risk, and returns. As a system, finance serves as a channel for the flow of money between those who have excess funds and those in need of funds. Common instruments for such transactions include bonds, notes, debt, and equities. Together, they allow investors to gain a return on their excess capital while providing firms, governments and other debtors with cash for productivity. Thus, finance and the financial system fundamentally aims to increase the productivity of people by efficiently allocating funds in the best projects.