We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Asymmetric Information - Essay Example

Comments (0) Cite this document
Summary
This situation is trickier in financial markets. Since the financial markets deal with money borrowing, lending, stock exchange and…
Download paper
GRAB THE BEST PAPER
Asymmetric Information
Read TextPreview

Extract of sample
Asymmetric Information

The various forms of asymmetric information include adverse selection, cost monitoring and moral hazard. (Bebczuk, 2003).The financial market is mostly affected by any of these forms which in turn lead to problematic financial transactions.
Asymmetric information leads to various problems out of which the opportunistic behavior is the most risky situation. Opportunistic behavior is a situation in which executives and managers of a company tend to differentiate the information. The original information is conveyed in two different ways to the people working in the organization and to the outsiders. (Karuratna, 2000).This is done to improve their contacts and financial transactions through which they can maximize their utilization of funds. This in turn affects the investors as they are not provided with proper information. Since the information is misinterpreted by the managers it leads to the predicament called as the opportunistic behavior. (Sharpe, 1990).The managers make use of this opportunity and their reported earnings get gradually increased. The opportunistic behavior shows desire of the managers and their urge to move on with the financial transactions. Managerial discretion may add up to the already sustaining problems there by resulting in loss to the people involved in the contract. In addition to that, it eventually increases discretion among the managers which also leads to loss in the amount of shares. (Sun, 2008).The shareholders tend to invest more money in a particular company and managers take advantage of this situation.
In a competitive financial market, opportunistic behavior poses greater risk to exporters as well as the party involved in transaction. The terms of contract are also not specified properly in the financial document. There are also two types of opportunistic behavior prevalent in financial markets. Opportunism ... Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Asymmetric Information Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Retrieved from https://studentshare.net/miscellaneous/409880-asymmetric-information
(Asymmetric Information Essay Example | Topics and Well Written Essays - 500 Words)
https://studentshare.net/miscellaneous/409880-asymmetric-information.
“Asymmetric Information Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.net/miscellaneous/409880-asymmetric-information.
  • Cited: 0 times
Comments (0)
Click to create a comment
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Asymmetric information and market disequilibrium
But in reality the pool of information knowledge varies with certain degrees among the agents of the markets i.e., among the buyers and the sellers leading to market distortions or attainment of disequilibria (Economics of organization, slide 3, 5) This has been a broad domain of study for the economists where market distortions occur as a result of asymmetry in information among the buyers and the sellers although they are willing eagerly for performing transactions in the market.
15 Pages(3750 words)Essay
Asymmetric or Symmetric Encryption
The methods available to encrypt data involves asymmetric and symmetric means. The present article emphasizes upon the benefits of these methods for data protection. Introduction Encryption of data is necessary in transmitting information through electronic means, to safeguard- data or information, sensitive documents and private communications made through internet, else the information could be distorted, filched, or misrepresented.
2 Pages(500 words)Essay
He implications of asymmetric information for the function of markets at both the microeconomic and macroeconomic levels
Еhe implications of asymmetric information for the function of markets at both the microeconomic and macroeconomic levels.In an analysis of the competitive market structure it is always assumed that the buyers and the sellers have perfect knowledge about the market.
8 Pages(2000 words)Essay
Insurance Model: Competitive Contracts
Consumers The consumers can be of two types, namely high risk (H) and low risk (L). These two groups of consumers have the same initial endowments e, which essentially are state contingent claims to consumption. These consumers are susceptible to an accidental loss in future.
4 Pages(1000 words)Essay
Asymmetric Key/Symmetric Key
Hashing algorithms are utilized to ensure data is not modified during transit – that is, to ensure data integrity. Lastly, signature based algorithms are used for authentication by providing a digital or electronic signature of the user. As an ABC institute of research has to protect highly sensitive information from its rivals, we will discuss symmetric and asymmetric encryption algorithms in this scenario.
3 Pages(750 words)Essay
Asymmetric Synthesis
However, as modern chemistry continues to discover catalytic systems which are organic, the popularity of cinchona alkaloids has become a famous catalyst as compared to other organic catalysts like (S)-proline (Groger, 2001) and simple peptides (Jarvo, 2000).
4 Pages(1000 words)Essay
Asymmetric Information
(Investopedia.com) iii. Put option - An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time. This is the opposite of a call option, which gives the holder the right to buy shares.
4 Pages(1000 words)Article
Economics of Industry
This question holds great significance in fast-paced, technology based industries who keep investment in human capital as crucial. For a firm, in order to augment the ability of their workforce so as to be a foil for investment in technology, it has to face a conventional make vs.
6 Pages(1500 words)Essay
Corporate finance
act with the underwriter and the underwriter takes in all the responsibilities leading to IPO including proper valuations of the shares, to selling it through proper channels in exchange of fees. But sometimes the investment banker indulges in what can be called spinning of
12 Pages(3000 words)Essay
What is the role of transactions costs and asymmetric information in the financial intermediation process In your answer make reference to the theories of financial intermediation, and the problems of adverse selection and moral hazard
Simultaneously, the criticality of financial intermediaries has also been subjected to continuous scrutiny that has leveraged the working pattern of the global financial market to a large
10 Pages(2500 words)Essay
Let us find you another Essay on topic Asymmetric Information for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us