This document provides information on key concepts for economics, banking and finance professionals. It discusses framing and how mass media and other actors can construct social phenomena. It also provides practical examples of how company profits affect shareholder dividends. Additionally, it covers abstraction and modeling, using stock market graphs as an example. Finally, it defines deductive reasoning and provides a case study on short selling stocks and the risks involved.

1. The skills of the Economics, Banking and
Finance (EBF) professional

2. Equity Market

3. Table of contents

4. Framing Definition
• Framing refers to the social construction of a
social phenomenon often by mass media
sources, political or social movements,
political leaders, or other actors and
organizations.
Framing

5. Practical example
Shareholders will gain the same
dividend if company’s profit raises
The more profit does company gain,
the more dividends will the shareholders
gain
Framing
A
B

6. If company have no profit,
shareholders still get dividend as the
percentage before
If company have no profit,
shareholders will not gain the dividend
Practical example
Framing
C
D

7. Practical example
Framing
A C
B D
Preferred
Shares
Common
Shares

8. Abstraction and Modeling
• Ignoring some aspects of a thing to
focus on one or a small number
• Essential for dealing with complex
objects or situation

9. Abstraction and Modeling
Stock market graph

10. Deductive reasoning
Based on generally
accepted principles
Specific case
Conclusion
Definition: Deduction is the use of general information to draw
conclusion about specific case or area.

11. Case: “Short selling”
• - The process of borrowing a security
and selling it in the future in the hope
of buying it back at lower price ->
profit.
Deductive reasoning

12. Deductive reasoning
Empirical evidence: Short squeeze
-> Shortening a share is very risky, profit are far from certain.

13. Thank you for listening