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Stockbrokers use math all the time from simple things like how many shares of XYZ can a client buy with $10,000 if the commission is $55 to advanced calculation when helping a client plan for retirement factoring in current assets, expected returns, inflation, taxes, and living expenses. A stockbroker also use math to evaluate stocks and mutual funds. Things like PE Ratio, Alpha, and Beta can indicate if a stock has become overpriced relative to its peers and the level of risk associated with certain funds. Granted computer programs and published statistics give you a lot of these answers but it is important that you understand how these calculations are determined so that you will better understand what the results mean and how changes in variables are likely to effect the given results.

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Q: How do stockbrokers use math?
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