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Asymmetric information |
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Asymmetric informationThe failure of two parties to a transaction to have the same relevant information. Examples are buyers who know less about product quality than sellers, and lenders who know less about likely default than borrowers. Both are common in international markets.Asymmetric informationInformation that is known to some people but not to other people.Asymmetric information Similar MatchesInformation content effectInformation content effectThe rise in the stock price following a dividend signal, or publication of some other related news. Limit order information systemLimit order information systemThe electronic system supplying information about securities traded on participating exchanges so that the best securities prices can be found. Fundamental InformationFundamental InformationInformation relating to the economic state of a company or economy. In market analysis, fundamental information is related to the earnings prospects of the firm only. Information RatioInformation RatioThe ratio of annualized expected residual return to residual risk. A central measurement for active management, value added is proportional to the square of the information ratio. Insider informationInsider informationPrice-sensitive information about a company that has not yet been made public.People who use the information either to make a profit for themselves or for someone else are committing a criminal offence (insider dealing).The inside dealer does not have to work for the company for his dealing to be an offence. So a stockbroker, or merchant banker, who knows about an impending takeover deal who buys shares in the target company with the intention of making a profit, is guilty. If he gets a friend to buy the shares, he is still guilty. In theory, the net is cast quite wide. In practice, insider dealing prosecutions are rare, and successful ones rarer still because the allegations are so hard to prove.Note the difference between insider dealing (an offence) and directors dealings (not an offence). Further SuggestionsInformation costsInformation Coefficient (IC) Nonpublic information For your information (FYI) Technical Information Complete information Information asymmetry Expected value of perfect information Intermarket Surveillance Information System (ISIS) Information services London Market Information Link price sensitive information Insider information Statement of Additional Information (SAI) Information Agent Incomplete information Information architecture Informational efficiency Informational efficiency |
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