maandag 2 november 2020

Market Capitalization Vs. Net Inflow of Money

When money flows into an asset, the price goes up. This can be quantified by the following formula.

C = (A+B)^2 / A^2

Where:

A = initial market cap

B = net inflow of money

C = price multiplication


So if the amount of investors money going into gold doubles, the market cap four folds.

For example:

A = 1 trillion

B = 1 trillion

C = 4 

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