Question

Which of the following theories or equations govern the premises of Traditional Finance: 1. Bottom Line Theory. 2. Prospect Theory. 3. The Behavioral Asset Pricing Model. Group of answer choices a. All of the above. b. 1 only. c. 1 and 3. d. None of the above.

Answer 1

Answer:

d. None of the above.

Explanation:

Traditional Finance uses three theories which are:

1. Mean Variance Theory

2. The capital Asset Pricing Model

3. Modern Portfolio Theory

Traditional finance is more mature and developed than behavioral finance. Traditional Finance is focused more towards practical approach in finance.