Financial economics is a branch of economics apprehensive
with the workings of financial markets, such as financing companies and stock
market. Financial economics are characteristically framed as time, uncertainty,
options and information.
In financial economics investors are requested to balance
risk and return when investing in assets or securities. As at present
investments has become a highly popular business trend it is easy to get misled
with the economy behavior at present. Therefore investors are concerned about
balancing their risk in investing today.
The pricing of the assets according to the market behavior is
fluctuating today with the current economy situation. Businesses are more concerned
on selling goods rather than being concerned about the supply against the
demand of the product today. Therefore capital asset pricing model has not been
practical with down fall of the economy at present.
Financial economics declare that pension assets should not be
invested in equities for a variety of practical and theoretical reasons as
eventually the risk is being assumed by
the beneficiary or the by employer today.
Contemporary financial economics research shows that
financial decision makers act rationally and primarily concerned about the
limits to rationality of economic agents today.
No comments:
Post a Comment