3/5/2018 0 Comments FormulasI’m a calculative and analytical person. For Pete’s sake, I chose to be a finance major and follow strict formulas on the daily to complete homework for class. If you don’t follow the formula, you don’t get the right answer and you don’t do well. I used to love the aspect of only one right answer because it’s clear and defined. Now, I don’t know. I’ve changed. I don’t know when this transformation took place but it did.
I just learned in my finance class that the CAPM formula, which helps to formulate growth rates has many theories against it that prove it is not a testable theory. What? My mind is blown, like a marshmallow in a microwave. Four years later, and I learn this formula may not even be accurate according to "famous" researchers. However, I am taught and have used it so much because it’s the best formula we’ve got for the unknown growth rate. I mean I have always been skeptical of the formula because the variable of the risk free rate seems fake. Is there really something that is risk free? I find that hard to believe. This realization is literally like telling me green beans are bad for me even though I was raised to eat them irregardless. Long story short, my grandma locked me in the basement once until I ate them because she thought I was spoiled and ungrateful. I love green beans now, so you can't trick me into not eating them now. In conclusion, I do not know if I am passionate about finance. I could be maybe somewhere at some point in time. It's just so practical that I haven't seen the exciting part of it. I know there is one because my dad is a stock broker and he pursues it as his hobby on the weekends outside of dentistry. There has already been so much time and money put into getting this business degree that I might as well dive straight into the deep end and see if I could see myself doing that; if not, I can fail and quit and not live life without knowing. This is too much opportunity cost I have dealt with to not actually pursue a career in finance.
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AuthorI am a senior business student at Miami University. Here are some of my random thoughts CategoriesArchives
May 2018
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