What do all these ratios have to do with Price Theory?

 Because currency gets the most coin tosses, and removed balances a probability moment.

It describes the optimum number of ways money can be combined with a set of independent products, when all products are independent and relatively prime.  The number of partitions being one less then the dimensionality.

So, in a dimension greater than two, the currency can count, by one,  sequentially through the n-1 other axis.  It will not over count.  

But, it is almost certain the dimensionality is less than four.  If your portfolio has more items, likely you are way under sampling.

Price theory is about Bayesian combinatorials, it is Markov N-tuple theory.

Who makes the binomials? The Huffman encoder does the best job, dunnit here too many times.  The investor with N partitions run the Huffman coder, run time, for each data series.   Your money binomial should be a scar, one coin toss per round.  Then you can go ahead and make the binomials in price.  You relative skew is interest rate relative to the center, the  ratio needed to keep a fair coin, it can be a gain or loss. Sometime you take a short term loss to cover the uncertainty of a big payoff later.

Who makes the dollar binomial?  Your favorite currency banker.  The currency comes from an S/L trading pit which is a risk adjusted representative sample of the economy. With fair access the S/L ratio will represent the total, probability adjusted, run time estimate of economic skew.  The currency banker targets that skew, when it is sub optimum, the Fed market account jumps bounds and an interest swap is executed.

A skew variance of 2% is fine with me, we should be able to tolerate higher. Your currency banker is reporting the skew in S/L, that is the optimum portfolio will have an allocation binomial that detects and reports the Nth moment of the distribution.  When that blows up it is because other other N-1 sectrors did not have enough trades to make their quota.  The Fed should target its market risk, keep it under a half point, maybe a point, it is the traders who take on price risk.