Each unit you will find discussion questions related to the chapters covered.  Please answer one of the assigned questions from each assigned chapter. Each unit you will find a “Discussion” thread to be used to post your answers to the chapter discussion questions.

Please select a question, develop a complete answer, and post it in the thread. You should also respond to a fellow student’s answered question by reinforcing their work or adding additional information or ask for clarification in regards to their answer.

Chapter 1:

• What is meant by an efficient market?
• What is the role of information in financial markets?
• How are real assets different from financial assets?
• Describe the recent trends in the global investment markets.

ANSWER

Chapter One

Recent trends in the global investment markets

Among other recent changes in the global investment markets, the most significant aspects have been their increasing integration and globalization, securitization as well as the constant expansion and increase of derivatives markets. The steady integration and globalization have been fostered by the liberalization of markets, improved technology procedures and a significant rise in telecommunication. These advancements have resulted in the creation of current investment and financial opportunities for various business and individuals around the globe (Chordia, Roll & Subrahmanyam, 2011). Safer and easy access to global investment markets for people and companies has resulted into a more efficient allocation of financial resources that is essential in promoting economic development and prosperity. Improved securitization, in its turn, has been affected by the rush in mergers and acquisition that has occurred in recent markets across the globe. The increasing financial markets have significantly come about since rapid advances in levels of technology, business engineering and risk control that have helped increase both the supply and demand for more complex products.

References

Chordia, T., Roll, R., & Subrahmanyam, A. (2011). Recent trends in trading activity and market quality. Journal of Financial Economics, 101(2), 243-263.