Asymmetric information refers to a situation in which one party in an economic transaction has more or better information than the other party[1][2][4]. Here are some key points related to asymmetric information:

- Asymmetric information is a common occurrence in economic transactions[2].

- The party with more information can use this advantage to take advantage of the other party[2][6].

- Asymmetric information can occur in various types of transactions, such as the sale of goods or services, borrowing and lending, and insurance[2][4][6].

- Adverse selection is a type of asymmetric information that occurs when one party has more information about the quality of a product or service than the other party[1][5].

- Moral hazard is another type of asymmetric information that occurs when one party in a transaction has an incentive to take risks that the other party cannot observe or control[1][6].

- Asymmetric information can lead to market inefficiencies, such as market failure and the inability to achieve optimal outcomes[1][3].

- Various mechanisms can be used to mitigate the effects of asymmetric information, such as screening, signaling, and reputation[1][4].

- Screening involves gathering information about the other party to reduce the risk of adverse selection[1][4].

- Signaling involves sending a signal to the other party to convey information about the quality of a product or service[1][4].

- Reputation is a way to reduce the effects of asymmetric information by building a reputation for honesty and reliability[1][4].

- Asymmetric information can be a significant issue in financial markets, where lenders and borrowers have different levels of information about each other's financial state[4][6].

Citations:

[1] wikipedia

[2] investopedia

[3] sciencedirect

[4] economicshelp

[5] masterclass

[6] corporatefinanceinstitute

Assets are economic resources that can be owned or controlled by an individual, corporation, or government and that have the potential to generate future economic benefits[1][3]. Here are some key points related to assets:

- Assets can be classified into different categories, such as current assets, fixed assets, tangible assets, and intangible assets[1][3].

- Current assets are assets that can be converted into cash within one year, such as cash, accounts receivable, and inventory[1].

- Fixed assets are assets that are not intended for sale and are used for long-term business operations, such as land, buildings, and equipment[1].

- Tangible assets are physical assets that have a measurable value, such as real estate, vehicles, and machinery[3].

- Intangible assets are assets that do not have a physical form but have value, such as patents, trademarks, and goodwill[1][3].

- The value of an asset can be determined by various methods, such as market value, book value, and fair value[1][3].

- The capital asset pricing model (CAPM) is a financial model that calculates the expected rate of return for an asset or investment[1][4][5]. It describes the relationship between systematic risk and expected return for assets[1][5].

- The arbitrage pricing theory (APT) is another financial model for asset pricing that relates various macroeconomic risk variables to the pricing of financial assets[1][6]. It factors in many sources of risk and uncertainty and looks at several macroeconomic factors that determine the risk and return of the specific asset[6].

- The goal of asset management is to maximize the value of assets while minimizing risk[3].

- Asset allocation is the process of dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash, to achieve a specific investment objective[1][3].

- Asset pricing models are used to determine the theoretical fair market value of an asset, which traders then look for slight deviations from the fair market price to trade accordingly[6].

Citations:

[1] investopedia

[2] hbr

[3] wikipedia

[4] theforage

[5] wikipedia

[6] oreilly

The Asian Crisis was a major global financial crisis that destabilized the Asian economy and then the world economy at the end of the 1990s[2][3][5][6]. Here are some key points related to the Asian Crisis:

- The crisis started in July 1997, when Thailand stopped defending the baht after months of downward market pressure, causing the currency to fall quickly[3][5].

- The contagion spread quickly, with currencies across the region falling—some quite catastrophically[3].

- The crisis was rooted in economic growth policies that encouraged investment but also created high levels of debt (and risk) to finance it[3][5].

- Some of the macroeconomic problems included current account deficits, high levels of foreign debt, climbing budget deficits, excessive bank lending, poor debt management, and weak financial regulation[3].

- In all of the countries at the center of the financial turmoil, its consequences have taken the form of a substantial shrinkage of investment and consumption[1].

- The underlying causes of the Asian crisis have been clearly identified, including substantial foreign funds becoming available at relatively low interest rates, as well as poor debt management and weak financial regulation[4].

- The International Monetary Fund (IMF) bailed out many countries but imposed strict spending restrictions in exchange for the help[3].

- The countries that were most severely affected by the Asian Financial Crisis included Indonesia, Thailand, Malaysia, South Korea, and the Philippines[5].

- The impact of the Asian Financial Crisis was not limited to Asia, as international investors became affected[5].

- The events that came to be known as the Asian Financial Crisis generally caught market participants and policymakers by surprise[6].

- The Asian Crisis led to significant changes in the way the IMF and other international organizations approach financial crises[1][6].

Citations:

[1] imf

[2] britannica

[3] investopedia

[4] imf

[5] corporatefinanceinstitute

[6] federalreservehistory

 

Arbitrage pricing theory (APT) is a financial model for asset pricing that relates various macroeconomic risk variables to the pricing of financial assets[1][2][3]. The APT model was proposed by economist Stephen Ross in 1976 as an alternative to the capital asset pricing model (CAPM)[2]. Unlike the CAPM, which assumes markets are perfectly efficient, the APT assumes that markets sometimes misprice securities before eventually correcting and moving back to fair value[2][6]. The APT model factors in many sources of risk and uncertainty, and it looks at several macroeconomic factors that determine the risk and return of the specific asset[6]. The goal of arbitrage is to take advantage of market inefficiencies, such as temporary price differences, to make a profit[1][5]. The APT model helps traders determine the theoretical fair market value of an asset, and traders then look for slight deviations from the fair market price to trade accordingly[6]. The APT model is a useful tool for analyzing portfolios from a value investing perspective, in order to identify securities that may be temporarily mispriced[2]. The APT model holds the expected return of a financial asset as a linear relationship with various macroeconomic indices to estimate the asset price[3].

Citations:

[1] wikipedia

[2] investopedia

[3] wallstreetmojo

[4] newyorkfed

[5] albany

[6] corporatefinanceinstitute

 

Arbitrage is a financial strategy that involves buying and selling the same or similar asset in different markets to profit from the differences in price between them[1][2][4][5][6]. Here are some key points related to arbitrage:

- The goal of arbitrage is to take advantage of market inefficiencies, such as temporary price differences, to make a profit[1][2][5].

- Arbitrage can be applied to various assets, including stocks, currencies, and commodities[1][4][5].

- There are different types of arbitrage, such as risk arbitrage, statistical arbitrage, and merger arbitrage[1][5].

- Risk arbitrage involves buying and selling securities in anticipation of a merger or acquisition[1][5].

- Statistical arbitrage involves using quantitative models to identify and exploit pricing discrepancies between securities[1][5].

- Merger arbitrage involves buying shares in companies prior to an announced or expected merger[1].

- The practice of arbitrage helps ensure that prices in competitive markets are very close[5].

- Arbitrage is considered a relatively low-risk exercise[2].

- The process of arbitrage can be used to generate income from trading a certain currency, security, or commodity in two different markets[4].

- Arbitrage can be risky if an investor takes advantage of better information or delays in the dissemination of prices[5].

- The theory of arbitrage pricing theory was developed by Stephen Ross in 1976[5].

Citations:

[1] investopedia

[2] investopedia

[3] study

[4] wallstreetmojo

[5] economicshelp

[6] indeed

Appreciation is the increase in the value of an asset over time. It can occur for a variety of reasons, including increased demand, weakened supply, or a change in inflation or interest rates[1][3][5]. Appreciation can be used to refer to an increase in any type of asset, such as a stock, bond, currency, or real estate[1]. The opposite of appreciation is depreciation, which reduces the value of an asset over time[1][4]. 

Here are some key points related to appreciation:

- Currency appreciation refers to the increase in the value of one currency relative to another in the foreign exchange markets[1].

- Capital appreciation refers to an increase in the value of financial assets such as stocks, which can occur for reasons such as improved financial performance of the company[1].

- In accounting, appreciation refers to an upward adjustment of the value of an asset held on a company's accounting books[1][5]. The most common adjustment on the value of an asset in accounting is usually a downward one, known as depreciation[1].

- Appreciation can be caused by a number of factors, like economic growth or changes in interest rates[3]. If a company’s growth is faster than that of similar companies or at a quicker rate than expected, then stock prices can increase and lead to appreciation as well[3].

- The goal of investing in assets like real estate or stocks is to buy when prices are low and see the value increase[4]. 

- Appreciation of assets can happen for a variety of reasons, such as an increase in demand for an asset or lower supply[5].

- Appreciation is the goal for most investors in finance, as their investment goes up in value, which means more profit if they choose to sell[6].

Citations:

[1] investopedia

[2] appreciationfinancial

[3] wealthspire

[4] experian

[5] fe

[6] robinhood

 Antitrust laws are regulations that promote competition and protect consumers by limiting the market power of individual firms and preventing anticompetitive practices[1][6]. In the United States, antitrust laws exist at both the federal and state levels and are enforced by agencies such as the Federal Trade Commission (FTC) and the Department of Justice (DOJ)[1][3].

The three core federal antitrust laws in the United States are:

- The Sherman Antitrust Act: This law, passed in 1890, prohibits specific conduct deemed anticompetitive, such as agreements to fix prices or divide markets (Section 1) and monopolization or attempts to monopolize a market (Section 2)[1][4].

- The Clayton Act: Enacted in 1914, the Clayton Act regulates mergers and acquisitions, complemented by guidelines published by the DOJ and the FTC[4]. It also prohibits certain anticompetitive practices, such as tying arrangements and exclusive dealing contracts[1].

- The Federal Trade Commission Act: This law, also passed in 1914, created the FTC and prohibits unfair methods of competition and unfair or deceptive acts or practices that affect commerce[1].

State antitrust laws often parallel the federal laws and aim to prevent anticompetitive behavior within individual states[4]. The primary goal of antitrust laws is to protect the process of competition for the benefit of consumers, ensuring strong incentives for businesses to operate efficiently, keep prices down, and maintain quality[1][2].

Citations:

[1] ftc

[2] ftc

[3] justice

[4] cornell

[5] wikipedia

[6] investopedia

 

Animal spirits is a term used by economist John Maynard Keynes in his 1936 book The General Theory of Employment, Interest and Money to describe the instincts, proclivities, and emotions that influence and guide human behavior, and which can be measured in terms of consumer confidence[1][2]. Animal spirits represent the emotions of confidence, hope, fear, and pessimism that can affect financial decision-making, which in turn can fuel or hamper economic growth[2]. The term animal spirits has also been used by scientists to describe how the notion of the vitality of the body is used[1]. Animal spirits can be seen as our interpretations of economics and the economy, our mental/psychological forces and constructs[4]. The concept of animal spirits is relevant to market psychology and behavioral economics, and it sheds light on complex issues and leaves readers with a better grasp of undercurrents and a rediscovered belief in principles of common sense and caution[3]. The Animal Spirits podcast is a show about markets, life, and investing that discusses all things financial markets, personal finance, favorite books, movies, and TV shows, parenting, the asset management business, and more[5][6].

Citations:

[1] wikipedia

[2] investopedia

[3] princeton

[4] amazon

[5] apple

[6] awealthofcommonsense

 

Amortization is an accounting technique used to periodically lower the book value of a loan or an intangible asset over a set period of time[4]. Here are some key points related to amortization:

- In accounting, amortization refers to expensing the acquisition cost minus the residual value of intangible assets in a systematic manner over their estimated "useful economic lives" so as to reflect their consumption, expiry, and obsolescence, or other decline in value as a result of use or the passage of time[1].

- Amortization is recorded in the financial statements of an entity as a reduction in the value of the asset[1].

- A mortgage amortization schedule is a table that lists each regular payment on a mortgage over time[2]. Part of each payment goes toward the loan principal, and part goes toward interest. As the loan amortizes, the amount going toward principal starts out small and gradually grows larger month by month[2].

- Amortization can also refer to the practice of spreading out capital expenses related to intangible assets over a specific duration—usually over the asset’s useful life—for accounting and tax purposes[4].

- Amortization as a way of spreading business costs in accounting generally refers to intangible assets like a patent or copyright[3]. Under Section 197 of U.S. law, the value of these assets can be deducted month-to-month or year-to-year[3].

- Loan amortization only considers the principal and doesn’t include interest[5]. An amortization schedule for a loan is a list of estimated monthly payments. For each payment, you'll see the amount going toward principal and the amount going toward interest[6].

Citations:

[1] wikipedia

[2] bankrate

[3] calculator

[4] investopedia

[5] santander

[6] creditkarma

 

Altruism is the practice of selfless concern for the well-being of others[1]. In the context of agriculture, altruism can manifest in various ways, such as farmers appealing to consumers' altruistic feelings to generate engagement with social media posts during COVID-19[3], or the public's altruism toward farmers being a hypothesis explaining the persistence of farm programs in the United States[6]. However, altruism toward others can also inhibit cooperation by increasing the utility players expect to receive in a noncooperative equilibrium[1]. Effective altruism is a philosophy and social movement that advocates for using evidence and reason to determine the most effective ways to improve the world[2][4]. In the context of agriculture, effective altruism can involve creating a new agricultural revolution by producing meat directly from plants or animal cells[2]. Altruism and cooperation can also lead to greater agricultural productivity and efficiency, as seen in the cooperation and efficiency of agricultural production in polygynous households in West Africa[1][5].

Citations:

[1] uchicago

[2] effectivealtruism

[3] springer

[4] effectivealtruism

[5] iza

[6] wiley