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Financial engineering - Coggle Diagram
Financial engineering
Finance
Decision about money
Account: profit
Finance: money
Rational financial decision
More value is preferred to less
The sooner cash is received the more value it has
Less risky assets are more valuable than risky assets
Major areas of finance
Financial markets and institutions
Banks, insurance companies, saving and loans, credit unions
Managerial finance
Decision madre bye financial managers: investment decision, finance and operative decision
Capital budgetin: should be acquire "something"
Investments
Wherever you do a investments
Financial services
Deal with the management of money, determine how to invest money
History of investments
1900s investments dominated bye small group
1920 growth of investments and then many people invest in the stock market
1929-1939 stok market
History Managerial Finance
1900s
Analysis and maximizing value 1960s
Innovative risk management in 1970
Globalization of bussiness
Improvements in transportation an dcommunications
Innovation of products
Evolution of Modern Finance
1900s bank were full service
Importance of managerial finance
fianancial managers coordinate decisions
Obtain and use fund that maximize the value
Value: the present value of the cash flows and asset is expected to generate in the future
Valuation process
Market factors/considerations (no hands in the business)
Firm factors/consideration (hands in the business)
Dividnd policy (should we reinvest or keep it)
Investor factors/consideration (the people that will invest)
Wait to Return Capital (WAT)
Recent Developments in Finance
Sustainability
A long-run process that focuses on improving the quality of life
