Finance is an important sector in the business environment

Finance is an important sector in the business environment Essay example
Finance & Accounting
Pages 11 (2761 words)
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Name: Tutor: Course: Date: Behavioral finance Introduction Behavioral finance is a branch in finance that handles finance using psychology-based theories to explain anomalies experienced in the stock market. The individuals’ decision to invest depends on the influence the stock market out comes.


Limits to arbitrage A limit of arbitrage is the maintenance of price at non-equilibrium for a certain period due to the restriction of funds. The market sets prices for given products which when they go low due to mispricing traders experience a low-risk profit assumes that whenever the mispricing of the public stocks. Rational firms work with professional money management firms to ensure the proper management of other people’s money. The low risk profit generates from rational traders if the equilibrium. If firms engage in arbitrage in a reaction bid, it leads to a stock mispricing extending for a period. Clients withdraw from investing as they anticipate a loss by investing. To ensure the funds are delivered on time, a manager must anticipate a loss while stabilizing a sale. A threat of this action on the corporate society works with the finance industry to supply the stock, development, manufacture, and distribution. Corporate and shareholders work together to form an ancillary business help in different stages in the supply. The finance industry deals with health hence it is about people. The industry is beneficial to the public hence remains important to the public. Products and services have saved millions of lives over the years. ...
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