Questions tagged [financial-markets]

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19 views

demand for money

I am currently studying the demand for money by Blanchard. this model assumes that the amount of money held is basically related to transaction levels and the the attractiveness of bonds. i.e.: ...
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1answer
28 views

What data/factors/attributes do the professionals monitor in a top-down analysis on the macroeconomics?

I am learning to do top-down analysis on a number of sectors in the US equity markets. I have never done it before and I would appreciate it if some professionals can share their experiences with me. ...
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'No arbitrage' vs 'Efficient market'

I am trying to wrap my head around the 'no arbitrage' (NA) and 'efficient market' (EM) assumptions, in particular their difference. Please correct me if I am wrong, but NA just claims that there is ...
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3answers
128 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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4answers
6k 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.
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7 views

Are IMF interventions in currency crises good leading indicators for the performance of financial assets in that country?

The point in time during a currency crisis when the IMF finally steps in tends to be relatively close to the trough of the crisis - at least it seems that way anecdotally. Is there any research that ...
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2answers
279 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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2answers
759 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 ...
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14 views

Comparing values of 5s and 7% notes

I am a beginner in investment. I was reading Security Analysis (Sixth Edition) by Benjamin Graham, and on page 63 the last paragraph is written that: A third kind of analytical conclusion may be ...
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11 views

Relation between Captial Market Line and Security Market Line

I am referring to the book, "William Sharpe et al, Investments, 6th Edition. I am trying to wrap my head around some lines from the book, pertaining to Security Market Line. It reads, "Earlier it ...
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1answer
24 views

What are financial service “passports”?

What are “passports” in the context of financial services? I have also heard the term “passporting rights.”
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1answer
44 views

Can futures buying/selling distort price discovery?

How credible is the suggestion that specific parties distort price discovery (rig the market) of a given asset by buying/selling corresponding futures contracts or any other derivatives. Should these ...
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0answers
26 views

Showing that a market model has arbitrage and describing martingales

This is an exercise which I came upon while studying an introduction to financial mathematics. Exercise : Consider the finite sample space $\Omega = \{\omega_1,\omega_2,\omega_3\}$ and let $\...
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3answers
322 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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1answer
57 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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1answer
121 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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2answers
76 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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1answer
49 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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1answer
65 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 ...
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1answer
3k 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 <...
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1answer
16 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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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 ...
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1answer
30 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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1answer
341 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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4answers
325 views

Why is gold a safe haven investment?

To me, it seems like gold is the ultimate example of something where the value should go down when the economy, stock market etc go down. Just like Ferraris, and other frivolous consumer luxury goods,...
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2answers
470 views

Is trading in the commodity futures much more riskier than trading in stock market futures?

My understanding is that the price of a stock at the stock exchange is determined by supply demand mechanics during trading hours, and the price of futures is determined by the price of the underlying ...
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23 views

Looking for data about collateral and safe asset

I'm supposed to report the evolution of the use of collateral on financial markets. I found some substantial data concerning the amount of collateral available (i.e. the amount of safe assets in the ...
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1answer
20 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....
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2answers
115 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 ...
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2answers
10k 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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3answers
291 views

Who were the economists who made lots of money in the financial markets? [closed]

I prefer to learn economic theories from economists who made lots of money from the financial markets and were aided by their economic ideas. Who were they? What are the notable economic theories did ...
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1answer
576 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 ...
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2answers
209 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 ...
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1answer
23 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
60 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 ...
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1answer
399 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
37 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
1k 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
155 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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38 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.
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1answer
2k 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.
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1answer
114 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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2answers
569 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 ...
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1answer
44 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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1answer
747 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
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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3answers
93 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
22 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 ...
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0answers
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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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1answer
111 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 ...