Financial economics

In economics, the financial markets is the mechanism that allows the people for easily buy and sell the financial securities, commodities and other fungible items of value. Financial economics is a branch of economics which is concerned with the resources of allocation over the time.

Generally, the financial economics deal with the working of financial markets such as financing of companies or the stock markets and it includes the following type of subject areas such as savings, budgeting, lending, investing, borrowing, hedging, insuring and asset management. In economics, the financial markets are the mechanism that gives permissions to the peoples to buy and sell the commodities or financial securities where as the stock market is a public and private market for the trading of company stock.

The size of the worldwide stock market is 51 trillion. In finance, the financial market gives the three types of facilities. These facilities are mentioned below:

The transfer of risk

The raising of capital

The international trade

Financing of companies is a legal existence which has a separate legal personality from its members. The legal rights and obligations of the corporations are defining in four ways. These four ways are:

The ability to sign contracts

The ability to hold assets

The ability to hire agents and

The ability to make by laws

Financial is focused on the top business decision makers especially in largest companies like investing, small business, etc where as the economics is the activity of social science that studies the distribution, consumption of services and goods or production. Even the demand for finance and economics continues to increase in a steadily globalizing world. The financial economics is dominated by the neoclassical dogma.