Secrets of Finances and Payday Loans

Parlour’s (1998) model considers the choice between market and limit orders to show the working of a limit order book. In her simplified world there are only strategic risk-neutral liquidity traders who are endowed with a different evaluation of the risky asset and arrive randomly at the market to submit either a market order (MO) [...]

Geopolitical risks like war and terror can create stress scenarios for all risky asset classes. The geopolitical situation has a strong impact on the risk aversion of investors. The events of September 11, 2001, provide a tragic example after which investors bought safe haven assets such as government bonds and gold at the cost of [...]

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 [...]