Risk and Returns Calculations Impact of Mathematics in Finance Essay

venture and Returns Calculations Impact of Mathematics in Finance - Essay ExampleFinancial calculations and theories be not nail down and effective unless they are linked with Mathematical concepts. Indeed there has been a great impact of mathematics in the financial stream. The mathematical concepts has enable the business doing individuals take more effective decisions related to financing, investments, ceiling budgeting and so on. Moreover, an investment decision calls for a areful evaluation of available alternatives, assessing of the reward and risk associated with each of the alternatives that are believed to best serve the investment objectives at hand.For instance, while making the decisions regarding investment and financing, the finance managers seek to extend to the right balance between risk and decrease.If the firm borrows heavily to finance its trading operations, then the surpluses generated out of operations would be sufficient to service the debt in the form o f interest and principal payments.The surplus or gain ground available to the owners would be reduced because of the heavy Debt servicing. If things do not work out as planned and the firm is unable to meet its obligations, the company is even exposed to the risk of insolvency. Similarly the motley investment opportunities have a certain amount of risk associated with the return and also the time when the return would materialize.The Finance manager has to decide whether the opportunity is worth more than its cost, and whether the additional burden of debt can be safely borne