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what is financeThe purpose of this lecture is to give you an idea about finance and career opportunities in this business area. After you finish reading this lecture, you will a have clear idea about finance and what you can do after finishing your graduation.

History of finance

If we look at history, we will find out that finance has been practiced from the beginning of human life. The word Finance is originally a French word and was founded by an English speaking community to mean ‘the management of money’. Since then it has been permanently placed on English dictionary.

Meaning of finance

In general sense the term finance means the arrangement of funds. If we try to describe the term finance than we will find two related activities: one is the management of available resources and another one is the actual process of acquiring the needed resources. Today, we cannot imagine a world without finance because individual, business and government all need resources to perform daily operation and finance is the subject which tells them how to raise resources at a minimum cost and how to get maximum profit from these resources.

Definition of finance

Finance is a broad term, it is difficult to give a perfect definition of finance. Many groups have provided finance definition in different ways. I will mention here some

According to Simon Andrade: “Finance is an area of economic activity in which money is the basis of the various embodiment's, whether stock market investments, real estate, industrial, construction, agricultural development, so on and area of the economy in which we study the performance of capital markets and supply and price of financial assets”.

According O. Ferrel C and Geoffrey Hirt Finance means "All activities related to obtaining money and effective use".

In general sense “Finance is a subject from which we can learn how to raise funds from different sources at a minimum cost and how to utilize these funds in different projects at a maximum return so that firm can gain profit”.

Career opportunities in finance

If you enjoy problem-solving and love working with numbers than a career in finance is perfect for you. A career in finance is not all about money, but it’s close to that. A career in finance and financial service offers a wide range of opportunities. Today we will discuss about the three broad areas which finance deals with such as:
career opportunities in finance
  • Money and Capital Markets: After graduation, many finance major looks for the job in a financial institution such as: banks, insurance company, mutual funds, investment banking firms. To be successful in such types of institution one needs complete knowledge of valuation techniques, what are the factors behind the rise and fall of interest rate and feature and function of various financial instruments for example, auto loan, certificate of deposits, mortgages and so on. Management of financial institution includes accounting, marketing, personnel and computer system as well as ability to communicate with your senior or junior both orally and writing so that you can get them to do their work perfectly in another word you must know how to motivate or influence a person. So one needs a good idea of these things to be successful in this area.
  • Investments: Finance graduates often go to work in the investment area. Finance graduates often work in sales or as a security analyst in a brokerage house. Others work for banks, insurance company, mutual funds in the management of their investment portfolios. A finance graduate work in the financial consulting firm as an adviser whose job is advising individual investors how to invest their capital. For investment organization, a finance graduate work is to help the organization raise new capital.
  • Financial Management: Financial management is the one with most job opportunities. Finance majors can work in any business as a financial manager as financial management is essential for every industry. Financial management is also important for performing Government jobs such as schools, hospital, highways, etc. The job opportunities in financial management start from making decision about plant expansion to choosing what type securities a firm should issue to raise their capital. Financial managers also have the responsibility to decide the credit terms so that an organization can know what inventory they should carry, what is the ideal amount of cash should they keep on hand as retained earnings, how much they should pay as dividend to the shareholder, what firm they should buy (Merger) etc..
Wherever a finance graduates enter to do the job he or she must have knowledge about all three areas to be successful. That’s all for today; thank you for staying with us.
What is finance? Definition meaning and career opportunities in finance
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