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Questions tagged [financial-markets]

The tag has no usage guidance.

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33 views

There is no reason deflation would reduce profits [closed]

Profits are the difference between input and output prices. In less cyclical sectors like materials profits would increase. The only reason they dont increase would be that resource depletion causes ...
0
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0answers
10 views

Capitalist saving rate

It is said that whatever capitalists save reduces demand. But whatever they leave in the Bank goes toward recapitalizing the Bank. Therefore why would the capitalist savings rate affect demand?
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2answers
49 views

What are the arguments for banning insider trading?

I can't see any economic argument for banning insider trading. In general, the point of allowing financial securities to be traded is to ensure that they are properly valued. "Insiders" seem better ...
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2answers
54 views

Why is a Normal Yield Curve a sign of a healthy economy?

I think the question is pretty self explanatory. I'm just trying to understand the logic behind why an upward sloping yield curve indicates a good economy?
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1answer
68 views

Why do ONLY Indian staffing/“consulting” bodyshops flood the US job market?

Why do ONLY Indian staffing/"consulting" bodyshop agencies flood the US job market, and why do they flood ONLY the US? This is definitely not just "Well, many Indians have at least somewhat ...
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0answers
33 views

What are theoretical justifications for M2/GDP to be a financial development index?

How one can theoretically justify use of M2/GDP as a financial development index? I know that M2/GDP is a common measure for financial development but I try to find its theoretical confirmation. I ...
4
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1answer
42 views

Are stock exchanges market makers?

Are stock exchanges like NASDAQ and NYSE market makers? In other words, are they providing liquidity by pairing individual buyers and sellers with each other in real-time? Or does it work differently?
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2answers
64 views

How does IS-LM model reduced investor confidence?

I am doing an essay on how a sovereign debt rating downgrade to junk status affects the economy. I wanted to use a theoretical framework to think about it, and seeing as an increase in the interest ...
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0answers
12 views

Asset pricing: If m is high when marginal utility is high (bad states of the world), how do we interpret m=a+b*f in relation to the CAPM?

I am quoting Cochrane, ch 9.1 here: " The CAPM... ties the discount factor m to the return on the ‘‘wealth portfolio.’’ Thefunction is linear: $m_{t+1} = a+bR{_{t+1}}^{W}$. ... It is conventional ...
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1answer
347 views

How to calculate average buy price when you buy, sell and rebuy

I wanted to get my avaerage buy price for some stocks I bought and see if I made money. So far for just buying and then later selling I have been calculating the avaege buy price using this formula <...
1
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1answer
63 views

World Stock Markets that went up in 2008

We all know that the US stock market(s) collapsed in price in 2008, see https://en.wikipedia.org/wiki/United_States_bear_market_of_2007%E2%80%9309. I was wondering what countries' stock markets went ...
4
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2answers
226 views

Are cryptocurrencies a ponzi scheme or a bubble?

Several users in this forum have addressed bitcoin and other cryptocurrencies as ponzi schemes. Bitcoins have several uses which could legitimate its value as a currency, but also have received ...
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0answers
11 views

Why when prices moves rapidly and higher volumes are traded, trend is to reverse?

I want to get the idea. I dont understand. If many people all invested many money in something, and they definetely hold it for growth - price must grow further. Why opposite is usually happening?
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1answer
15 views

Gold charts on different currencies

I have this two charts of gold prices for the last 60 days. One is in Dollars and the other in Euros. Why they are not an exact match?
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0answers
9 views

Stock options with “dividend based on stock value” before terminal time?

I am looking for an analysis of the following exotic derivative: It is a kind of like a call option on a particular individual stock but with an extra element: At set intervals (or continuously) $t$ (...
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0answers
8 views

Graph of liquidation of trade versus price of commodity

Suppose I want to open a long position (that which increases in value as the commodity goes up in value) in some commodity whose price at the time of opening the trade is, say, $p$. The position is ...
0
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1answer
25 views

Financial markets predictions [closed]

How do economists/investors predict supply and demand in financial markets such as indices, currencies, etc?
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0answers
7 views

Getting data for all stocks in SP500 for a whole year

Can somesone guide what the easiest way is to get data for all components of the SP500 for a whole year? 2015 or 2016 would preferably. I can go in Yahoo Finance and get the data by searching for ...
0
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0answers
13 views

How did shrinks of Japan's stock market result a rise in Japan's net foreign wealth over the 1990s?

When Japan's stock market lost 3/4 of its value over the 1990s, for example, American and European owners of Japanese shares saw the value of their claims on Japan plummet, and Japan's net foreign ...
0
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1answer
17 views

Why are most of open market orders so far from the mid price?

Say there is an exchange with open buy and sell orders, why are there so many orders placed. So far away from the mid price. So for example is lowest sell order is say 1.01 and highest buy order is 1....
2
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1answer
237 views

Why obligation acceleration triggers Credit-Default Swaps (CDS)?

ISDA Credit Event definitions state that CDS can be triggered in an event of Obligation Acceleration. What does that mean? If for example, a country pays a bond 1 year prior to maturity are CDS ...
1
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2answers
139 views

Monthly average rate of discount, 3 month Treasury bills, Sterling Vs 1 Month

I have been advised by one of my professors to use UK treasury bills for a risk free rate when calculating expected returns for stocks. I wanted to know whether I should be using 1 month T-Bills or 3 ...
1
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1answer
20 views

What aspects of macroeconomics should I address for convincing an investor to invest in a certain country? [closed]

I have a task at my internship which is to write 2 pages about the economic conditions in my country. My question is what I could include in my research. Surely, I'll address inflation, currency ...
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2answers
57 views

Market crash causes

Does market crash like in 1930 and 2009 are always due to excessive and careless lending activity? Lets say all lending is done in careful manner and no corporate fraud is done somehow, would it be ...
0
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1answer
101 views

S&P 500 total return excel sheet

Where can I find an excel sheet with total return (that is, with dividend reinvestment) of the S&P 500? I have only found an online "calculator" (not an excel sheet), or an excel sheet with ...
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2answers
35 views

How long do stock markets usually take to process complex new public information?

Here is a question that I've been thinking about for a while: Theoretically, assuming investors are rational, a stock's price will be equal to its its intrinsic value (present value of discounted ...
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2answers
390 views

What is the difference between USD/EUR and EUR/USD when talking about Forex

I was recently watching the Forex market and I want to know what does it means when you see something like EUR/USD -0.04% -1.1208 Does that mean the USD dropped with 0.04% against EUR or vice versa?...
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1answer
47 views

How does a liquidity guarantee for Asset-Backed Commercial Paper used to finance a Conduit work ?

A liquidity guarantee was what a lot of banks used to insure outside investors payments if an asset in a Conduit defaulted. The way they were doing it was not really dispersing the risk evenly ...
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0answers
14 views

Is there any legislation regualting correlation amongst assets?

I know the Dodd-Frank Act exist in part because of the mortgage backed securities crisis and a large piece of that is to protect Americans from the "too big to fail" financial holdings companies. But ...
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1answer
36 views

Can someone explain to me why no new bill exist to regulate financial derivatives yet? [closed]

Isn't it bad economically for soft regulation on financial instruments like derivatives.
3
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1answer
92 views

Does a stock market crash "undo” the multiplier effect's money creation?

The economy grows for multiple reasons, but one is the multiplier effect due to fractional reserve banking. When there is a crash, is that artificially created money essentially destroyed, resetting ...
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0answers
28 views

How do foreign governments purchase US treasury notes?

Do they have direct relationship with the US Treasury or do they buy them out in the open market? Does that mean that they have to have banking/brokerage accounts with US banks?
0
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1answer
38 views

Find high resolution market data for a single ticker?

I'm doing my dissertation at the moment and for it, I need high-resolution market data. The only problem is I'm a student and haven't got much money. A lot of sites I have seen want monthly ...
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2answers
3k views

Difference between Unit and Share?

I was reading the ISO 10962 (the 2015 version) which classifies financial instruments. In the Collective Invesment Vehicle (CIVs) they separe them in: Standard Funds Hedge Funds REIT ETF Pension ...
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1answer
974 views

Difference between double auction and continuous double auction?

What is the difference between double auction and continuous double auction? Sometimes I feel that they were types of two-sided auction but sometimes I feel as if they were two separate concepts.
4
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2answers
281 views

Saddle path equilibrium on financial market with rational expectations

In his 1978 paper introducing the Tobin tax Tobin states that : As a technical matter, we know that a rational expectations equilibrium on markets of this kind is a saddle point. That is, there ...
3
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1answer
236 views

Free Data Source for Credit Spreads?

Credit spreads are a key economic indicator. They are the difference between yields on corporate and government debt. They are a measure of confidence in the private sector, they provide insight into ...
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2answers
63 views

Using the Dividend Discount Model when no current dividend exists?

Say a company is doing an IPO and we expect them to start paying dividends in 5 years? I understand how we could use the Dividend Discount Model to predict their stock price 4 years from the IPO. But ...
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3answers
84 views

Free source of large amounts of financial data

I am looking for a free source of large amounts of long term financial data on stocks, exchange rates, government bond rates, etc. I know there is Thomson Reuters, but this requires a costly ...
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1answer
4k views

What are the advantages and disadvantages of the IS LM model?

How does the IS-LM model help economists in the day to day analysis of the economy? There are just too many assumptions that are not there in the real world.
2
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2answers
3k views

Explaining the net capital outflow - trade balance identity

In an open economy, the following equation always holds, it is an identity: $S-I=NX$ where $S-I$ represents net capital outflow and $NX$ represents trade balance (net exports). This equation tells ...
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1answer
16 views

Which institutions are in the eurodollar market?

My main question is: how much of the eurodollar market is claims issued by depository institutions or Bank Holding Companies? It's about a $4tn market, but who's in it? Who is funding themselves in ...
3
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1answer
82 views

Connection between negative interest rates and negative bond yields

In an answer to one of my other questions: Why does falling global bond yields signal coming deflation, the answerer states: Whereas central banks set rates by policy, long term bond yields are ...
7
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2answers
93 views

How will London's role as a financial center be affected after the Brexit and what are possible alternatives?

I looked around on this site and couldn't find anything close to what I'm asking on Economics SE, so I hope it is the right place to ask. I am interested in but have no background in economy, so all ...
4
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1answer
163 views

Why does falling global bond yields signal coming deflation

In this article, it suggests that, "Bond markets are signalling something very nasty coming down the road at us – an all encompassing, worldwide deflation. " I cannot understand why bond yields ...
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2answers
568 views

Why is the Chilean economy so much better than the rest of the countries in South America?

Why does Chile have a better economy than all of the other countries in latin America? It is labeled as a high income country by the IMF, It is the only Latin American country that is part of the ...
9
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1answer
328 views

Financial Smart Contract on Ethereum: can an Ether Futures contract be priced in Ether?

BACKGROUND This is more in the wheel-house of economics than programming, but after a few different titles, I thought it best not to skirt around the root of my question OR create a oddly phrased USD ...
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1answer
88 views

Statistical tests/models to use for Macroeconomic and Financial Research

I am a student, new to research and have chosen a challenging field to perform my research in. While I have been reading about similar research's, as part of my literature review, I observed various ...
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0answers
42 views

Why don't firms and individuals do much more risk management? Couldn't they all hedge all kinds of risks financially?

There are many risks in the economy that agents could hedge. For example, house prices can go up or down, healthcare costs canchange, gas prices constantly change in fact, food prices,etc. They all ...
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0answers
29 views

Calculating Annualized Average Return

I am currently working on a problem set in a book that asks me to compute the annualized average return for a portfolio, benchmark, and then the relative return from the annual returns reported. I ...