How might the application of finance improve your professional and personal decisions?

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Expert Solution

Application of finance is highly important in both personal and professional life. Finance could be said to be lifeline of various decision making.

Finance could be used in making various decision in personal life such as decision related to different kinds of investment in different types of asset class. It is dependent upon risk taking ability of the investor. If the individual is high risk taking ,he would look for allocation into such asset class which are high beta and have a probability of earning higher than expected rate of return, he would always look for beating the market rate of return. An investor who is risk averse wood look for investment into such securities which yield a low rate of return but also have a low risk exposure such as different kind of debt as well as gold and silver

Finance has application in professional life as well if you are working for a financial company as a financial analyst, you have to provide advice regarding investment as well as capital budgeting decisions. Salaries from professional life should be e invested into such asset class which must yield high rate of return in order to beat the overall market rate of return so that in the long run the goals and objective of investors could be fulfilled and he can have a surplus at emergency Times.

So finance has high degree of application in both personal as well as professional life and balance must be maintained in order of investment to beat the market rate of return and to deal with the cost of inflation .

jeff jeffy answered 1 year ago

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