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Financial economics is the branch of economics concerned with the workings
of financial markets, such as the stock market, and the financing of
It attempts to answer questions such as:
* How are the prices of financial assets, such as shares and bonds,
* What are the effects of a company choosing different methods of
financing its operations, such as issuing shares or borrowing?
* What portfolio of assets should an investor hold in order to best meet
Key concepts used in financial economics include:
* Efficient markets theory