Finance

Financial Theories Overview/Chart

Maria Guillemard

University of Phoenix

Financial Theories Overview/Chart

10 Financial Theories

Number order | Financial Theories | Acronym | Theory Description | Theory Examples | Theory Significant Attributes in Workplace |

1). | Efficiency Theory | EMT | Resources and goods are spread throughout the company in a timely and efficient manner. The companies owners choose which products and resources to regulate through the business (Qfinance: The Ultimate Financial Resource, 2013) | Stocks will trade at fair value, making it impossible for investors to be greedy and commit SEC violations.(Investopedia, 2013). | Warren Buffett has beaten the market over long periods of time (Investopedia, 2013). |

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2. | Theory of Investment | TOI | According to Toporowski (2008,) the founder of TOI Minsky suggests this theory as a company’s business ventures and how they invest their money is suggestive to the business cycle. | Financial advisors believe that the double dipped recession starting in 2008, has shifted the government’s policies and the effects it has on the financial world. Toporowski (2008), also suggests from Minsky’s theory if a debt is not paid off in full by the fiancée and financier, then the economy will go back into a recession. This is what happened in 2008 with many automobile companies and when the housing market crash. | Toporowski (2008) has found that although a company may be in debt or not in debt, this is not the single determinant if the company will succeed. An example would be Starbucks Coffee Company. In 2008, Starbucks was starting to go broke. They had over saturated many cities with stores on every corner in a 3 block radius. They were losing significant profit loss and stock prices were dropping to less than $7.00/share, however low they were, 5 years later they have made vast improvements and have succeeded to now stock prices are over $70.00/share...