A synopsis of “Principles of Finance”

By: Nicole Shalit

In the book it says finance is the set of activity dealing with the management of fund. More specifically it is the decision of collection and use of fund. It is a branch of economics that studies the management of money and other assets.

Section one focuses on investments and returns.

Chapter one is the basics. In this chapter you will learn about the principle of relative valuation, role of a CFO and finance manager, and you will learn the answer to the question is accounting and finance one and the same?

Chapter two deals with the time value of money. After reading this chapter, you will know the concept of returns, the present value of money, the opportunity cost of capital, and the effect of compounding and future value.

Chapter three is about the applications of time value of money. You will learn how to make investment decisions, all about perpetuities, and annuity. You will then be able to move to chapter four.

Chapter four is a look into bonds. In this chapter you will find rate of returns, the yield curve, valuing bonds, the yield to market curve, and advance concepts of bonds.

The last chapter is chapter five. You will learn all about risks and returns. There are different types of risks and returns. Once you finish this chapter you will be able to answer what is risk?

Financing has many branches and can be used not only in most any job, but also in everyday life. If you are looking into accounting, business, or marketing, it is suggested that you take a financing class.