Secrets of Finances and Payday Loans

In the rest of this blog three models will be outlined in which the choice between limit and market orders is the key element of traders’ optimization strategies. The model by Parlour (1998) concentrates on the time priority rule, which governs limit order books, and shows how the choice between market and limit orders depends [...]

From the industry structure it becomes obvious that the average credit quality of the issuers in the US investment grade market is lower than in the Euro corporate bond market. The current rating of the Euro market is A, whereas it is only A_ in the US market. Over the last 5 years this differential [...]

Market participants often cite changes in investors’ risk appetite as a possible explanation for developments in global financial markets that cannot be explained by changes of market fundamentals. Indeed, financial crises often seem to coincide with abrupt shifts in market sentiment from risk tolerance to risk avoidance. While fundamentals undoubtedly remain of significant importance, these [...]

The corporate bond market is a leading indicator of economic activity. However, its forecasting power is obviously not perfect, because – like equity markets – credit spreads sometimes predict recessions that do not occur subsequently. After the 1987 stock market crash, for example, credit spreads widened significantly. Asimilar observation could be made in 1998, following [...]