The expert on economic science can create abstract hypothesis for analyzing and predicting the production, distribution and consumption processes. The financial market that becomes the financial system’s practical area is considered as the fair mechanism for the process of financing production, distribution and consumption of products that consist of goods and services. Some theoretical hypothesis and assumption made by economic experts might be useless and unreliable when applied the real financial system.
Because the financial system and financial market is controlled and mostly affected by emotion and errors created by the financial agents, it is almost impossible to predict the condition and fluctuation happened on the system. The investment safety, measurement of products and the market itself are very complex, affected by various variables and operate under uncertain condition. The prediction made for the whole system is almost impossible.
The study of finance is basically about the practice and the relation among variables affecting the system. It is become the part of economic study that focusing on the effect of the financial system upon the whole economies that include business, government decisions, households and the financial market. The management of assets, investment decision and product marketing is very important to the study of finance.