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Convexity affects the pricing of financial assets by influencing how their prices change in response to interest rate movements. Assets with higher convexity are more sensitive to interest rate changes, leading to greater price fluctuations. This can impact the overall risk and return profile of the asset, making it an important consideration for investors and financial analysts.

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What does capital refers to in economics?

In economics, capital refers to the assets and resources that are used to produce goods and services. It can include physical assets like machinery, tools, and buildings, as well as financial assets like money and investments. Capital is a key factor of production, alongside labor and land, and is essential for enhancing productivity and driving economic growth. Additionally, capital can be classified into various forms, such as fixed capital and working capital, depending on its role in the production process.


Why are used goods financial assets and government assets not counted as GDP expenditures?

why goods r not assets


What does property mean in economics terms?

In economics, property refers to the ownership rights individuals or entities have over resources, goods, or assets. It encompasses both tangible assets, like land and buildings, and intangible assets, such as intellectual property or financial instruments. Property rights are essential for economic efficiency, as they provide incentives for investment, innovation, and responsible resource management by clearly defining who can use and benefit from what resources. Secure property rights also facilitate trade and economic transactions by establishing legal frameworks for ownership and transfer.


How are financial assets created in the free enterprise system?

Financial Assets are created in the free enterprise system using private individuals wealth, and they purchase things.


What are the structures of financial system?

assets. liabilities and equity?

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