Some of the Unanswered Questions in Finance

A very dynamic development of finance in the last 50 years is inter alia probably due to experiments and innovations in this field. Previously, theoretical base could not explain and predict movements especially in volatile times. The new finance appeared 50 years ago (portfolio theory, CAPM, the efficient market theory, M&M theorem) and made substantial progress in understanding movements in globalised and internationalised financial markets. However, many questions remain open. The author tries to put emphasis on some of these questions, perfectly aware that these are not the only ones. Unresolved questions are related to company's aims, project's risks, degree of port-folio optimisation, importance of liquidity, dividend policy, as well as factors that deter-mine M&A. As the new finance is not able to predict and explain volatile movements, a question that should be posed is whether it is appropriate to add some non-economic factors as the behaviourist theory suggests. Although the behaviourist theory is an important part of new finance, it is unfortunately the only theory able to explain movements in volatile times. In conclusion, many questions still remain unanswered and wait for appropriate theoretical explanations.