Ratio and Rational: Difference between pages

Revision as of 13:41, 1 May 2018

Economics.

Classical economics assumes that all market participants are profit-maximising and risk averse.

This combination of preferences is known as 'rational' in the efficient market hypothesis.

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-. ''Maths and finance.''
+''Economics''.
-A ratio is one number divided by another.
+Classical economics assumes that all market participants are profit-maximising and risk averse.
-For example, the ratio of a company's share price to its earnings, known as the price to earnings ratio.
+This combination of preferences is known as 'rational' in the efficient market hypothesis.
-Ratios are widely used in finance as part of financial ratio analysis.
-Depending on the relationship being measured, financial ratios are generally expressed as numbers, for example a price to earnings ratio of 10.
-Other ratios are conventionally expressed as percentages, for example a dividend yield of 2%.
-Ratios may also be expressed as proportions, for example a debt to equity ratio of 1:1 (the same as 100%, or 1).
-. ''Law''.
-Abbreviation for Ratio decidendi.
 == See also ==
-* [[Debt to equity ratio]]
+*[[Behavioural economics]]
-* [[Dividend yield]]
+*[[Classical economics]]
-* [[Earnings per share]]
+*[[Efficient market hypothesis]]
-* [[Price to earnings ratio]]
+*[[Profit maximisation]]
-* [[Ratio analysis]]
+*[[Risk]]
-* [[Ratio decidendi]]
+*[[Risk averse]]
-[[Category:Accounting,_tax_and_regulation]]
+[[Category:Corporate_financial_management]]
-[[Category:The_business_context]]
-[[Category:Compliance_and_audit]]