Personal finance
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How much money will be needed by an individual (or by a family), and when?
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Where will this money come from, and how?
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How can people protect themselves against unforeseen personal events, as well as those in the external economy?
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How can family assets best be transferred across generations (bequests and inheritance)?
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How does tax policy (tax subsidies or penalties) affect personal financial decisions?
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How does credit affect an individual's financial standing?
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How can one plan for a secure financial future in an environment of economic instability?
Personal financial decisions may involve paying for education, financing durable goods such as real estate and cars, buying insurance, e.g. health and property insurance, investing and saving for retirement.
Personal financial decisions may also involve paying for a loan, or debt obligations.
Corporate finance
Managerial or corporate finance is the task of providing the funds for a corporation's activities. For small business, this is referred to as SME finance. It generally involves balancing risk and profitability, while attempting to maximize an entity's wealth and the value of its stock.
Long term funds are provided by ownership equity and long-term credit, often in the form of bonds. The balance between these forms the company's capital structure. Short-term funding or working capital is mostly provided by banks extending a line of credit.
Another business decision concerning finance is investment, or fund management. An investment is an acquisition of an asset in the hope that it will maintain or increase its value. In investment management – in choosing a portfolio – one has to decide what, how much and when to invest. To do this, a company must:
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Identify relevant objectives and constraints: institution or individual goals, time horizon, risk aversion and tax considerations;
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Identify the appropriate strategy: active v. passive – hedging strategy
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Measure the portfolio performance
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