Are the Markets Risky?

Markets are very, very risky- More risky than the standard theories imagine. I agree that securities industrys are very risky and riskier than standard theories assume. In the modern financial theories, economists calculate the market risk by its volatility which is quantified by the bell curve. On the other hand, in order to decide what is the exact market risk, assumptions have to carry black swans and arrive at them into account while calculating the market risk. However, this is not possible; we can not predict what is pass to happen in the future or which events are expiry to affect the markets. Sometimes those capricious events have a solid impact on battalions interaction with the markets and sometimes not. For example, in sports, the clubs boards of directors buy new players or hire new trainers in order to be fortunate at the end of the season; however, in the long run, unpredictable events occur and affect the teams performances. So, the success that clubs are expecting depends on assorted factors in the long run, such as referee decisions, injuries, supporters, media and so on. That is why the risks that clubs take are bigger than they assume, according to the coat of the impacts of those unpredictable events. I think that markets risks follow the same system of logic that sports clubs do.

Since we are not capable of predicting the exact future and peoples reaction against those unpredictable events, the markets pull up stakes always be riskier than the modern financial theories calculations. On the other hand, people are risk takers because I think that we have an infinite frenzy to be a winner and it is in our nature to take risks in order to increase our wealth. So, when it comes to making investments, there are a couple of questions that come to peoples mind. How will people take risk, which instruments are going to be utilise and who will people trust? I think that the nearly reliable approach to investments most likely comes from the knowledgeable and experienced... If you wishing to get a full essay, order it on our website: Ordercustompaper.com

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