What Is Finance?
Finance is a Chinese vocabulary, and pinyin is jn róng. Finance [1] refers to economic activities such as currency issuance, circulation, and withdrawal, loan issuance and withdrawal, deposit deposit and withdrawal, and exchange transactions.
- [jn róng]
- There are five components of finance:
- 1. Financial objects: currency (funds). The currency circulation regulated by the monetary system is advanced, turnover and value-added;
- 2. Financial methods: Credit methods, mainly based on borrowing, are represented. The objects of transactions in the financial market are generally written proof of credit relationships, contractual documents of creditor's rights and debts, etc .;
- Including direct financing: None
- The European Central Bank's definition of financial stability has a certain representativeness. It is expressed as: Financial stability refers to a type of financial institutions, financial markets, and market infrastructure that operate well and resist various shocks without reducing the efficiency of saving to investment conversion. status.
- United States
- Keynes Beauty Contest
- Pageantism is a theory about financial market investment founded by the famous British economist John Maynard Keynes. Keynes used the "beauty pageant theory" to explain the mechanism of stock price fluctuations, and pointed out that financial investment is like a beauty pageant. It is not essential for investors to buy the stocks they think are the most valuable. Zhongwen wins the game, and uses a game similar to drums and flowers to describe the risks in stock market investment.
- Random Walk Theory
- In 1959, Osborne (M.F.M. Osborne) proposed the theory of random walk from the perspective of Brownian motion theory, thinking that buyers and sellers in stock transactions are equally clever and witty, and the current stock price has basically reflected the relationship between supply and demand; stock prices The change is similar to the "Brownian motion", which has the characteristics of random walk, and its movement path does not have any regularity to follow. Therefore, stock price fluctuations are unpredictable, and the theory of predicting future stock price trends based on technical charts is actually nonsense.
- The log-normal random walk theory based on Brownian motion has gradually become the classic framework of financial markets, and has also laid the foundation for the development of quantitative finance in the future.
- Modern Portfolio Theory (MPT)
- In 1952, American economist Harry M. Markowit applied the two mathematical concepts of the mean and variance of portfolio returns for the first time in his academic paper "Asset Selection: Effective Diversification". The above clearly defines investor preferences, explains the principle of investment decentralization in a mathematical way, systematically illustrates the problem of asset portfolio and selection, and marks the beginning of Modern Portfolio Theory (MPT). The theory holds that an investment portfolio can reduce non-systematic risks. An investment portfolio is determined by the securities and their weights. The selection of unrelated securities should be the goal of constructing an investment portfolio. It put forward the concept of risk for the first time on the basis of traditional investment returns. It believes that risk rather than return is the focus of the entire investment process. It also proposes an optimization method for investment portfolios.
Financial Publishing Information
- ISSN Print: 2161-0967
- ISSN Online: 2161-0975
Financial Editorial Board Information
- Associate editor
- Prof. Jianping Ding, Shanghai University of Finance and Economics
- Editorial Board
- Prof. Laijun Luo, Renmin University of China
- Prof. Zhaojun Yang, Hunan University
- Prof. Wing-Keung Wong, Hong Kong Baptist University
- Prof. Guobing Shen, Fudan University
- Prof. Liang Peng, Georgia Institute of Technology
- Prof. Shujin Li, Zhejiang University
- Prof. Shugeng Dai, Xiamen University
- Prof. Guowen Han, Wuhan University
- Prof. Hui An, Dalian University of Technology
- Prof. Huayu Sun, University of International Business and Economics
- Prof. Rongbao Gu, Nanjing University of Finance and Economics
- Dr. Yifang Chu, Nankai University
- Dr. Wei Cui, Peking University
- Associate Professor Zhao Xiujuan, Dr. Xiujuan Zhao, Beijing University of Posts and Telecommunications
- Associate Professor Xu Bin Dr. Bin Xu, Central University of Finance and Economics
- Dr. Ning Zhang, The central university of finance and economics
- Prof. Chenghu Ma, Fudan University
- Prof. Changyun Wang, Renmin University of China
- Associate Professor Cai Chang, Dr. Chang Cai, Central University of Finance and Economics