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Financial Economics - Coggle Diagram
Financial Economics
Risk personality
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Risk-neutral
indifferent to risk, focusing on maximizing expected return only
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Investment decisions
Net Present Value (NPV)
difference of PV of cash inflows and outflows over time
Formular- Dis & Advantages
'>0: profit, =0 no P no L, < 0 loss
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NPV
Advantage
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Clear and direct meaning - <0, >0
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Disadvantage
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no count non-financial factors (environment, social)
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