Traditional Culture Encyclopedia - Traditional festivals - Credit noun explanation of finance
Credit noun explanation of finance
Finance is the reintegration of existing resources after the realization of value and profit equivalent circulation. Professional term is: the implementation of the process from savings to investment, narrowly can be understood as finance is dynamic monetary economics. The essence of finance is the circulation of value. There are many types of financial products, which include mainly banks, securities, insurance, trusts, etc.. Finance involves a wide range of academic fields, including: accounting, finance, investment, banking, securities, insurance, trust and so on. Finance is a kind of trading activity, and financial trading itself does not create value, so why is there money to be made in financial trading? According to Mr. Chen Zhiwu, financial transactions are a way to realize future income, that is, tomorrow's money to spend today. Does spending more of tomorrow's money cause inflation. Simply put the frequency of financial transactions is an important indicator of the ability of a region, area, or even country to prosper economically.
The traditional concept of finance is the study of the circulation of monetary funds. And the essence of modern finance is the capitalization process of business activities. The Western definition, The New Pal Graves Dictionary of Economics, refers to the operation of capital markets, the supply and pricing of assets. Its basic components include efficient markets, risk and return, substitution and arbitrage, option pricing and corporate finance. Gold was once the only medium of international trade. In the era of barter economy, traders could only conduct counterpart transactions and barter. As a result, human economic activity was greatly constrained. In the era of the gold standard economy, value and wealth are based on and standardized by the physical asset, gold, and this objective physical method is very conducive to the smooth development of the global economy. However, as a carrier of value circulation, the unfavorable side of gold such as handling, carrying, conversion and other inconvenient physical constraints, so that it in turn gave way to the more flexible paper money (currency). Today, the monetary economy has not only long replaced the original barter economy, but also covered the gold standard economy.
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