ASYMMETRIC INFORMATIONANDBENEFITS OF FINANCIAL DERIVATIVES
Journal Title: International Journal of Research in Social Sciences - Year 2017, Vol 7, Issue 7
Abstract
The purpose of this paper is to present the main trends regarding the assymetric information, using the available statistical data on OTC financial derivatives. Information failure occurs when people have inaccurate, incomplete or misunderstood data and so make potentially wrong choices. In modern financial economics; managerial adverse selection&moral hazard are widely accepted as impediments to effective contractual arrangements between the manager and investors, resulting in inefficiencies of overall corporate management. Financial derivatives amplify the consequences of asymmetric information through implicit leverage if a party to the contract fails to follow agreement. Use of derivatives and the extent of derivatives usage are associated with lower asymmetric information. The companies facing medium level of information asymmetry are more likely to hedge, while companies with very high and low levels of asymmetric information tend to speculate.
Authors and Affiliations
Aleksandra Stankovska and LjupcoStojceski
Keywords
Related Articles
- EP ID EP20104
- DOI -
- Views 388
- Downloads 14
IMPRESSION MANAGEMENT WORKS IN CAREER SUCCESS! : MYTH OR REALITY?
"Vasthrena Vacha Vapusha" (Sanskrit Saying) means a person is judged by his Dreams, Talk and Appearance. The above sentence itself reflects that impression management has its seed in our ancient scriptures. It is comm...
A STUDY ON STUDENTS PERCEPTION AND SATISFACTION LEVEL TOWARDS MBA PROGRAMME IN PERIYAR UNIVERSITY
The present study is an empirical analysis designed to measure the MBAstudents perception and satisfaction level towards the MBA programme they study. study undertaken with sample of 100 students. While selecting this...
A STUDY ON PARTICIPATORY BUDGETING IN DECENTRALIZED OPERATIONS - A CASE STUDY OF TANZANIAN LOCAL GOVERNMENT AUTHORITIES
The idea of involving local citizens in decision making process, budgeting and local development programmes has attracted special attention to both developed and developing countries. Following the contention that; c...
FOOD SECURITY SYSTEM IN INDIA – ISSUES AND CHAENGES
India has now achieved self sufficiency in food production but due to lack of adequate number of warehousing facilities a considerable portion of agricultural products is spoiled every year by rotting in rain water. Ev...
Representing the life of a Dalit: A Study of KAnchA ilAiAh’S untouchAble god
Dalits are the people who are economically, politically and socially exploited and are forced to live as untouchables outside the village doing all the low level jobs offered to them by the privileged people of the s...