Financial economics is a branch of economics that studies the relationship between financial variables, such as prices, interest rates, and investment, and the economy as a whole. It involves the analysis of how businesses, individuals, and governments allocate resources over time in the presence of uncertainty and varying levels of risk. Key areas of focus in financial economics include: 1. **Asset Pricing**: Understanding how assets such as stocks, bonds, and real estate are valued in the market.
New to topics? Read the docs here!