Financial Economics

Economics () is the social science that studies the production, distribution, and consumption of goods and services.

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". 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: asset pricing (or "investment theory") and corporate finance; the first being the perspective of providers of capital, i.e. investors, and the second of users of capital.