What is an exception in Java and how is it handled?

An exception is a problem that arises during the execution of a program. It is handled using try, catch, and optionally finally blocks.

For example:

try {
    int result = 10 / 0;
} catch (ArithmeticException e) {
    System.out.println("Cannot divide by zero");
} finally {
    System.out.println("This block is always executed");
}