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1. What do financial markets sell?   2. Write an expression for the present value of the...

1. What do financial markets sell?  

2. Write an expression for the present value of the future damage from climate change. What happens to the present value if the discount rate is higher? Does this explain why some ignore the dangers of climate change?

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Answer #1

q1) financial markets is a platform for buying and selling of shares & securities. it can sell stocks, t-bills, govt bonds, commerical paper, collateralised borrowing debt obligation, certificate of deposit ,etc either through money market or through capital market .

q2) pv of the future damage from climate change cant be formulated. this is because the damage cant be quantified and it is uncertain. hence we can at the most bet through complex derivatives.

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