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Financial literacy is the possession of skills, knowledge, and behaviors that allow an individual to make informed decisions regarding money. Financial literacy, financial education and financial knowledge are used interchangeably. [1] Financially unsophisticated individuals cannot plan financially because of their poor financial knowledge.
Financial independence is a state where an individual or household has accumulated sufficient financial resources to cover its living expenses without having to depend on active employment or work to earn money in order to maintain its current lifestyle. [1]
Nudge is a concept in behavioral science, political theory and economics which proposes designs or changes in decision environments as ways to influence the behavior and decision making of groups or individuals—in other words, it's "a way to manipulate people's choices to lead them to make specific decisions".
Each of these departments influences marketing decisions. For example, research and development have input as to the features a product can perform and accounting approves the financial side of marketing plans and budget in customer dissatisfaction.
This theory helps to understand and predict various financial decisions and behaviors, including investment choices, debt management, mortgage use, cash, saving, and credit management. It posits that individual intentions and attitudes, subjective norms, and perceived behavioral control are key factors influencing behavior.
Each decisions made by financial managers must be strategic sound and not only have benefits financially (e.g. Increasing value on the Discounted Cash Flow Analysis) but must also consider uncertain, unquantifiable factors which could be strategically beneficial.
Researchers in experimental finance can study to what extent existing financial economics theory makes valid predictions and therefore prove them, as well as attempt to discover new principles on which such theory can be extended and be applied to future financial decisions. Research may proceed by conducting trading simulations or by ...
The scope here - ie in non-financial firms [12] - is thus broadened [9] [67] [68] (re banking) to overlap enterprise risk management, and financial risk management then addresses risks to the firm's overall strategic objectives, incorporating various (all) financial aspects [69] of the exposures and opportunities arising from business decisions ...