Branches of Finance: Department of Ducation - Bureau of Curriculum Development

SENIOR HIGH SCHOOL TRAINING SCHEDULE
Branches of
Finance
DEPARTMENT OF DUCATION – BUREAU OF CURRICULUM DEVELOPMENT

Public Finance
It deals with the collection
of taxes and budget
allocation for programs
designed to benefit the
general public and the
production and distribution
of public goods.
Personal Finance
It is field of finance
which gained popularity
especially among the
younger generation of
income earners.
Corporate Finance
It is primarily concerned
with the management of
all financial activities of
an enterprise or a
business organization.
The study of corporate finance maybe
categorized into four interrelated areas:
1. Financial Markets and

Institutions
– covers banks, insurance
companies, finance
companies and other
financial intermediaries
2. Investments
– focuses on investment
options and decisions
made by both individual
and corporate investors
3. Financial Services
– services offered by
organizations whose line
of business is to help
individuals and other
organizations manage
money
4. Managerial Finance
– every organization, public or
private, relies heavily on sound
decisions on the following:
 Cash Flows
 How to finance the acquisition of
assets
 Which financing options to access
when the supply of cash is
deficient
 What to do with the firm’s excess
cash
 Optimal inventory levels
 Accounts receivable and accounts
payable
 How much of the earnings should
be paid out to dividend vs. how
much should be reinvested in the
firm
 Whether to merge or acquire other
firms
Relationship between Accounting
and Finance
Managerial Accounting
- Involves the
preparation of reports
which are intended to
aid internal users in
decision-making
Financial Accounting
-keeps track of all the
historical transactions
of a business which will
then be used in the
preparation of reports
intended for the use of
external parties.
The Most Common Types of Financial
Institutions
1. Commercial Banks
- Accepts deposits from
individuals and
organizations that have
excess funds
Institutions
1. Commercial Banks
- Accepts deposits from
individuals and
organizations that have
excess funds and provide
loans to those who need or
want to borrow money
Institutions
2. Savings and Loans

- The bulk of the
financial transactions
in S&L are dedicated
to residential
mortgages
Institutions
3. Credit Unions
- Normally associated
with or are on
offshoot of
cooperatives
Institutions
4. Investment Banks
- Perform the task of an
intermediary which
facilitates the
transactions of
individuals and
institutions in investing
Institutions
5. Insurance Companies
- Provide individuals and
organizations a way to
manage risk
- They use statistics as a
predictive tool to make
financial projection
Institutions
6. Brokerage
- Financial institutions that
earns through
commissions
- Facilitates the buying
and selling securities
Institutions
7. Investment Companies
- Corporations wherein
individuals and other
organizations invest in
investment portfolios that
are managed by
professionals who tasked to
keep track of market trends
Financial Market
It is a means for buying
and selling of stocks,
bonds, and other
financial instruments
Bonds
- Financial instrument
that exchange money
for future interest
payments and
repayment of principal
Stocks
- Shares of a
corporation sold to
investors
- Financial instruments
where a company
sells ownership
interest
Money Market
- Transactions involving
short-term debt
securities take place.
 Treasury bills
 Commercial paper
 Negotiable certificates
of deposit
Capital Market
- Where transactions
involving long-term
debt, or those maturing
in more than one year
The Role of Financial Intermediaries in
Financial Markets
1. Reduce Costs
– intermediaries make
transactions more
cost-efficient
Financial Markets
2. Diversification
– Intermediaries help
savers of funds lower their
risk by helping them
choose the types of
financial products that they
will include in their portfolio
Financial Markets
3. Pooling of funds
– Intermediaries can
pool funds from several
savers in order to grant
to a single borrower a
loan involving a huge
sum of money
Financial Markets
4. Financial Flexibility
– Intermediaries offer a
variety of financial
products to both savers
and borrowers of funds
Financial Instrument
It is a written obligation
of one party to transfer
something of value,
usually money, to
another party at some
future date, under
certain conditions
Most Common Financial Instruments
1. Savings
– regular account or
time deposit
– investors earn minimal
interest
2. Loans
– short-term loans or
long-term loans
– collateralized and
noncollateralized loans
3. Bonds
– loan granted to
other organizations
by individuals and
organizations with
excess funds
4. Security
– ownership of stocks
of a publicly traded
company, or a bond
issued by a
government agency
5. Treasury Bills
– yield no interest but
sold at a discount
– earning on T-bills is
minimal as the risk
level is very low
6. Insurance Products
–homes, vehicles,
businesses and other
properties, among others
Insured – policyholder
Insurer – insurance
company
6. Mutual Funds
–based on pooling of funds
from different investors.
-the fund invested into
different financial products
such as securities, stocks,
and bonds
Uses of Financial Instruments
1. As means of payment
to purchase goods and/or
services
2. As a store of value to
transfer purchasing power
into the future
Uses of Financial Instruments
3. To transfer risk from

one person to another
Types of Financial Instruments
Cash Instrument
- Determined directly by
the markets
- They can be
securities, loans and
deposits
Derivative instruments
- Derive their value from
the value and
characteristics of one or
more underlying entities
Derivative instruments
- They can be exchanged-
traded derivatives and
over-the-counter (OTC)
derivatives.
Reflect Upon: ¼ crosswise
At what age do you think an
individual should learn about
savings and investments? Why
do you say so?
Assignment: PPT
You are Business Finance professor. You
are tasked by the program director to
discuss careers in finance to encourage
more senior high school enrollees.
Prepare a slide presentation all possible
professions in this field to give junior
high school students a clear overview of
what to expect if they take an ABM track
in senior high school. Make sure you
feature in your presentation all possible
professions, the expected duties and
responsibilities of each, and the
advantages of pursuing each profession.
You may include successful personalities
in this field with their corresponding

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SENIOR HIGH SCHOOL TRAINING SCHEDULE

DEPARTMENT OF DUCATION – BUREAU OF CURRICULUM DEVELOPMENT

1. Financial Markets and

2. Savings and Loans

3. To transfer risk from

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