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Please give your example(s) to address at least any two principles of finance.

Please give your example(s) to address at least any two principles of finance.

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Answer #1

1. Money has a time Value- This is the primary principle of finance as The money starts to lose it's value because of factors like inflation.

For example ,The value of the same amount of money you have today and you'll have after 5 years are different so you need to beat inflation.

2. Principle of risk and reward - There is always a risk to park money in a specified asset class as it is exposed to different type of risks.

So there are rewards for Investments in different classes too . So one needs to manage his risk to reward ratio.

For example, if you invest in mutual funds for gains , you'll get exposed to Various market risks.

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