Ethics in Financial Markets - Essay Example

Only on StudentShare

Extract of sample
Ethics in Financial Markets

They are known to reduce the stock market volatility and offering a cooling effect on the US economy. The bond market is also part of the financial market that is traded at the stock exchange. Bonds can simply be termed as loans. When the prices of the stock go up, those of the bonds go down and vice versa.
Most governments and other corporate entities usually borrow from the market in form of bonds listed on the capital markets and they have a big effect on the mortgage interest rates. Commodities are also traded in the commodities future markets e.g. Crude oil, copper and other minerals. Futures involve a mechanism where a commodity is paid today for its delivery in future. Futures have a tendency to goad traders to borrow money so as to purchase the commodity making the deal to go sour should the price of the commodity dip, hence has a major impact on the stocks and the overall economy as a whole. Another form of the financial market is the Hedge fund. Hedge funds have over the years become popular due to the high returns it offers to the high end investor. Hedge funds do invest heavily in the futures and some analysts have argued that they help check the volatility of the stock market and in extension the US economy. Hedge funds though are being blamed for the 2009 recession. ...
Download paper


Financial markets involve financial transactions that an investor engages in, in order to make money, resulting in the growth/ expansion of the business. It encompasses: the stock market -these are ownership shares of a public listed company that are sold to investors in order for them to raise capital…
Author : dooleyverona

Related Essays

Globalization of Financial Markets
The impact on the stock markets themselves is difficult to predict, and could change investments and trading styles in ways that cannot be suggested from this naïve point (Sabri, 2006). For example, moving all stock exchanges from the physical to the electronic will create what is essentially one grouped exchange, meaning that any differences in the exchanges and their consequences will be eliminated (Sabri, 2006). Additionally, there may be consequences for the NASDAQ because of this conglomeration, as lower performing exchanges are incorporated into the more resilient. It is difficult to...
3 pages (753 words) Essay
Financial Institutions and Markets
A monetary policy employed by a country can either be an expansionary monetary policy or ‘contractionary’ monetary policy. Expansionary monetary policy helps in increasing the money supply in the economy of a country at a faster rate than normal and in case of ‘contractionary’ monetary policy, the money supply increases at slower rate or even fall behind in the economy. Expansionary monetary policy is often employed to prevent unemployment during recession. It happens because of interest rates going lower which therefore attracts credit facility to be available easily for the business...
8 pages (2008 words) Essay
Economics and Financial Markets
This is what will be dissertated in the following.
10 pages (2510 words) Essay
Liberalisation of Financial Markets
during the 1970s and 1980s and was characterised by the abolition of credit and interest rate ceilings, the abolition of controls on international movements of capital, as well as the abolition of regulations affecting a wide range of financial activities in a significant number of OECD countries. (Blundell-Wignall and Browne, 1991).
8 pages (2008 words) Essay
Financial Markets Master Essay
In comparison to their peaks at the end of 2007, the Dow Jones Industrial Average Index and the DAX index have dropped almost 50% in value. Considering recent events many investors have reconsidered the concept of fair value of a stock and the efficiency of techniques used. In addition to this, the approach applied by many academics on Technical and Fundamental Analysis1 and of Efficient Market Hypothesis theory, rather than on how to forecast, has induced us to base the structure of this essay on a similar approach. Therefore in Section 1, 2 and 3 after providing a brief overview of FA and of...
9 pages (2259 words) Essay
Financial Markets
Under financial discussions & research, options fall under a particular style or family. Theoretically speaking, the style or the family of options refers to a class that signifies the category into which that particular option comes under. The options are generally verified & studied by analyzing the dates on which these options may be exercised. Such options come under the purview of the European & American Styles. There are many more types of options available. The similarity between all of them is that they come under the 'Vanilla Options' wherein, the options are evaluated on the basis of...
4 pages (1004 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!