Who buys and who sells options: the role of options in an economy with background risk

Article Abstract:

The degree of risk aversion expressed by agents and investors in financial markets has been found to be significantly influenced by the presence of non-hedgeable and background risks of a particular contract. Results revealed that the risk-taking behavior of investors is influenced by the existence of background and non-hedgeable risks, rather than management utility functions. It was further shown that agents with a greater degree of background risk are more inclined in buying options while those who possess minimal background risk tend to sell them.

Asset & Risk Management, Analysis, Risk assessment, Evaluation, Options (Finance), Risk perception

---

Aggregate liquidity in banking: the role of loan commitments and liquidity constraints

Article Abstract:

Companies's access to short-term loans is a key liquidity source. Credit markets are characterized by asymmetric information and this can lead to trade credits being in excess supply, which can mean that there is too much liquidity and not enough investment in projects for the long term. Banks can tackle the problem by imposing loan constraints, and the overall effect is a reduction in liquidity which helps to foster long-term investment. This model fits in with the Keynesian view that a trade-off exists between long-term investment and liquidity.

Banking industry, Economic aspects, Credit, Loans

---

Finance and the firm

Article Abstract:

Recent research has focused on bringing together the economic theory of the firm and the theory of corporate capital structure. It has been suggested that capital structure can be seen in the context of the theory of the firm. This is because companies have various different ways of raising capital, each of which is a different level of 'internalisation' of the finance process.

Similar abstracts:

• Abstracts: Healthy bodies and thick wallets: the dual relationship between health and economic status. Vignettes and self-reports of work disability in the United States and the Netherlands
• Abstracts: Assisting in the transformation of the Russian economy. A homegrown loan program
• Abstracts: Technical progress and aggregate fluctuations. On the local stability of the stationary solution to variational problems
• Abstracts: Hedge funds and the collapse of Long-Term Captal Management. Divergence, big time
• Abstracts: Neoclassical norms and the valuation of national product in the Soviet Union: comment. The demise of Soviet industry: a regional perspective

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.