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Old 01-04-2004, 03:06 PM
John A. Weeks III
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Default Re: Financial Math Information

In article <bt8nh3$6ta$06$1[at]news.t-online.com> , Radley
<radleyramirez[at]hotmail.com> wrote:

- quote -

> I would like to know if there are websites that explain in detail the
> mathematical equations financial planners use to extrapolate better pay-offs
> with loans and investments? It seems to me that financial planners live by
> the law of averages and I could crank out two yearly average percentage of
> earnings and have the lower percentage be the money maker and the higher
> percentage be the big loser. I'm always looking for something to learn.
> Some of the math seems like fuzzy logic to me.


> From my experience, financial planners live by the principal of risk

versus reward. In general, the more reward one wishes to earn, the
more risk one must be prepared to take. A planner would evaluate
his/her client and do one of the following:

- design a portfolio that maximizes return based on the risk tollerance
that the client is willing to accept;

- design a portfolio that minimizes risk based on returns that the
the client wishes to achieve;

- some portfolio that lies between these two extremes.

It really doesn't take a lot of math to do this. The ability to
compare two numbers to see which one is bigger (or smaller), simple
addition and subtraction, and the ability to compute percentages
and tax rates.

Given that, I don't understand what you are looking for, or what
it means to "crank out a yearly average". Can you elaborate?

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

  #-1  
Old 01-04-2004, 11:33 AM
Radley
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Posts: n/a
Default Financial Math Information

Hello,

I would like to know if there are websites that explain in detail the
mathematical equations financial planners use to extrapolate better pay-offs
with loans and investments? It seems to me that financial planners live by
the law of averages and I could crank out two yearly average percentage of
earnings and have the lower percentage be the money maker and the higher
percentage be the big loser. I'm always looking for something to learn.
Some of the math seems like fuzzy logic to me. Maybe that's how Enron got
overlooked! ;D Thanks in advance.

Radley


 

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financial, information, math
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