Definition of Financial economics:
Financial economics is a branch of economics that analyzes the use and distribution of resources in markets in which decisions are made under uncertainty. Financial decisions must often take into account future events, whether those be related to individual stocks, portfolios or the market as a whole.
Branch of economics focused on the elements of time, risk, opportunity cost and other variables related to financial decisions. This field of study concentrates on how financial moves are made under uncertain conditions.
Making financial decisions is not always a straight-forward process. Time, risk (uncertainty), opportunity costs, and information can create incentives or disincentives. Financial economics employs economic theory to evaluate how certain things impact decision making, providing investors with the instruments to make the right calls.
How to use Financial economics in a sentence?
- Financial economics often involves the creation of sophisticated models to test the variables affecting a particular decision.
- It employs economic theory to evaluate how time, risk (uncertainty), opportunity costs, and information can create incentives or disincentives for a particular decision.
- Financial economics analyzes the use and distribution of resources in markets in which decisions are made under uncertainty.
Meaning of Financial economics & Financial economics Definition