Financial economics is the branch of economics characterized by a "concentration on monetary activities", in which "money of one type or another is likely to appear on both sides of a trade".[1] Its concern is thus the interrelation of financial variables, such as prices, interest rates and shares, as opposed to those concerning the real economy. It has two main areas of focus:[2] asset pricing (or "investment theory") and corporate finance; the first being the perspective of providers of capital and the second of users of capital.
References[]
- ↑ William F. Sharpe, "Financial Economics", in Macro-Investment Analysis. Stanford University (manuscript). Retrieved on 2009-08-06.
- ↑ Merton H. Miller, (1999). The History of Finance: An Eyewitness Account, Journal of Portfolio Management. Summer 1999.