Formal sciencesFormal science is a branch of science studying disciplines concerned with abstract structures described by formal systems, such as logic, mathematics, statistics, theoretical computer science, artificial intelligence, information theory, game theory, systems theory, decision theory, and theoretical linguistics. Whereas the natural sciences and social sciences seek to characterize physical systems and social systems, respectively, using empirical methods, the formal sciences use language tools concerned with characterizing abstract structures described by formal systems.
Natural sciencesNatural science is one of the branches of science concerned with the description, understanding and prediction of natural phenomena, based on empirical evidence from observation and experimentation. Mechanisms such as peer review and repeatability of findings are used to try to ensure the validity of scientific advances. Natural science can be divided into two main branches: life science and physical science. Life science is alternatively known as biology, and physical science is subdivided into branches: physics, chemistry, earth science, and astronomy.
Academic disciplinesAn academic discipline or academic field is a subdivision of knowledge that is taught and researched at the college or university level. Disciplines are defined (in part) and recognized by the academic journals in which research is published, and the learned societies and academic departments or faculties within colleges and universities to which their practitioners belong. Academic disciplines are conventionally divided into the humanities, including language, art and cultural studies, and the scientific disciplines, such as physics, chemistry, and biology; the social sciences are sometimes considered a third category.
Common lawIn law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions. The defining characteristic of common law is that it arises as precedent. Common law courts look to the past decisions of courts to synthesize the legal principles of past cases. Stare decisis, the principle that cases should be decided according to consistent principled rules so that similar facts will yield similar results, lies at the heart of all common law systems.
Corporate financeCorporate finance is the area of finance that deals with the sources of funding, and the capital structure of corporations, the actions that managers take to increase the value of the firm to the shareholders, and the tools and analysis used to allocate financial resources. The primary goal of corporate finance is to maximize or increase shareholder value. Correspondingly, corporate finance comprises two main sub-disciplines.
Investment managementInvestment management (sometimes referred to more generally as asset management) is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institutions, such as insurance companies, pension funds, corporations, charities, educational establishments, or private investors, either directly via investment contracts/mandates or via collective investment schemes like mutual funds, exchange-traded funds, or REITs.
Financial risk managementFinancial risk management is the practice of protecting economic value in a firm by managing exposure to financial risk - principally operational risk, credit risk and market risk, with more specific variants as listed aside. As for risk management more generally, financial risk management requires identifying the sources of risk, measuring these, and crafting plans to address them. See for an overview. Financial risk management as a "science" can be said to have been born with modern portfolio theory, particularly as initiated by Professor Harry Markowitz in 1952 with his article, "Portfolio Selection"; see .
Decision theoryDecision theory (or the theory of choice; not to be confused with choice theory) is a branch of applied probability theory and analytic philosophy concerned with the theory of making decisions based on assigning probabilities to various factors and assigning numerical consequences to the outcome. There are three branches of decision theory: Normative decision theory: Concerned with the identification of optimal decisions, where optimality is often determined by considering an ideal decision-maker who is able to calculate with perfect accuracy and is in some sense fully rational.
Financial economicsFinancial 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 share prices, interest rates and exchange rates, as opposed to those concerning the real economy. It has two main areas of focus: asset pricing and corporate finance; the first being the perspective of providers of capital, i.e.
