In this example, we would take my answer to the question “How would take my exam for me to understand the structure and dynamics of financial markets?” To start with, I would like to point out that I am not an engineer or a financial analyst. My goal in this article is to give students a broad overview of some of the key issues associated with the study of financial markets so that they may better appreciate this material in their future study of this material.
When I ask myself the question “How would take my exam for me to understand the structure and dynamics of financial markets?” I cannot help but think of all the years of college, high school, and early work experience that I had in order to learn how to think and reason properly in this regard. Now here comes the main part of my answer: If you want to learn how to take my exam for me to understand the structure and dynamics of financial markets, you need to learn from those who have done so before you! Otherwise, you would be studying from the wrong crowd, and you would fail your test.
The first step towards answering this question is understanding what financial markets are, in general. In this regard, I would like to mention two broad theories on which the modern theory of financial markets is based. The first is the rational expectations theory, also called technical analysis. The second is chart Theory, which postulates that the patterns we see in the charts, i.e., the price actions, are the real and unbiased responses of market participants to the real and unbiased market factors. Both theories provide the basis for the modern understanding of the structure and dynamics of financial markets.
Then I will discuss a third theory, which is primarily concerned with the measurement of risk. According to this view, the amount of risk per asset is the measure of value. Thus, the amount of risk per stock or bond is the measure of expected returns. This third theory, together with rational expectations theory, provides the basis for financial market pricing. The combination of these three theories provides the basis for measuring the risk to the total assets of a portfolio.
Let’s now proceed to answer the third question posed in the title. According to the second theory, the price action cannot be predicted. According to the third theory, the prices of the securities markets can be predicted. Assuming either of these assumptions, I believe that these questions are designed to test your preparedness and your knowledge. I will let you decide which of these assumptions is the right one for you.
Now, if you select the assumptions in the first paragraph as the measures of risk, then your measures of financial markets should be based on the assumption that the price of the securities in the market is not influenced by internal or external factors. On the other hand, if you select the assumption based on the perception that the prices are influenced by external factors, then you measure the risk in the sense that you want to eliminate or reduce the possibility of negative surprises in the market. These three assumptions play important roles in the financial markets, but you can learn more about them by taking my free online money management course. This course is developed keeping in mind the objectives of financial management.
There are two concepts that I would like to point out in this article. One is the concept of structural and dynamic features and the other is the concept of feedback. Structural features refers to the relationships between the prices and the structures. Dynamic features refers to the feedback mechanisms that take place between the structure and the prices. All the concepts will help you to take my exam for me and they will prepare you for the PMI exam.