The Role of Market-Maker/Dealer Inventories in the Price Formation Process

A Survey

Nonfiction, Social & Cultural Studies, Political Science, Politics, Economic Policy
Cover of the book The Role of Market-Maker/Dealer Inventories in the Price Formation Process by Evelyn Rill, GRIN Publishing
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
Author: Evelyn Rill ISBN: 9783668080300
Publisher: GRIN Publishing Publication: November 4, 2015
Imprint: GRIN Publishing Language: English
Author: Evelyn Rill
ISBN: 9783668080300
Publisher: GRIN Publishing
Publication: November 4, 2015
Imprint: GRIN Publishing
Language: English

Bachelor Thesis from the year 2015 in the subject Business economics - Economic Policy, grade: 1,3, University of Frankfurt (Main) (Faculty of Economics and Business Administration), course: Chair of Corporate Finance, language: English, abstract: Due to the importance of inventories and the fact that asymmetric information models are extensively discussed in literature, this thesis exclusively focuses on inventory control models and provides a survey of theory and empirical results on the role of inventory in the price formation process. Because most of the relevant literature is based on the U.S. exchange market, this thesis is mainly confined on inventory control of specialists on the New York Stock Exchange (NYSE) and of dealers on the National Association of Securities Dealers (NASDAQ). To understand the costs of holding inventory, Section 2 introduced three important drivers of inventory: capital constraints, liquidity and volatility. Section 3 summarises the effect of market maker inventory and its costs on liquidity and how this affects the bid-ask spread. In Section 4, the impact of inventory on asset prices, especially of inventory levels, is discussed in more detail. Section 5 briefly turns to changes in market structure and how they affect the role of traditional market makers and their inventories. Section 6 finally concludes.

View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart

Bachelor Thesis from the year 2015 in the subject Business economics - Economic Policy, grade: 1,3, University of Frankfurt (Main) (Faculty of Economics and Business Administration), course: Chair of Corporate Finance, language: English, abstract: Due to the importance of inventories and the fact that asymmetric information models are extensively discussed in literature, this thesis exclusively focuses on inventory control models and provides a survey of theory and empirical results on the role of inventory in the price formation process. Because most of the relevant literature is based on the U.S. exchange market, this thesis is mainly confined on inventory control of specialists on the New York Stock Exchange (NYSE) and of dealers on the National Association of Securities Dealers (NASDAQ). To understand the costs of holding inventory, Section 2 introduced three important drivers of inventory: capital constraints, liquidity and volatility. Section 3 summarises the effect of market maker inventory and its costs on liquidity and how this affects the bid-ask spread. In Section 4, the impact of inventory on asset prices, especially of inventory levels, is discussed in more detail. Section 5 briefly turns to changes in market structure and how they affect the role of traditional market makers and their inventories. Section 6 finally concludes.

More books from GRIN Publishing

Cover of the book Natural Death in Baudrillard by Evelyn Rill
Cover of the book The depiction of war in the novels 'Slaughterhouse-Five' and 'A Farewell to Arms' by Evelyn Rill
Cover of the book Toward a Russian market economy by Evelyn Rill
Cover of the book The lessons to be learned from Peyton Farquhar - 'An Occurrence at Owl Creek Bridge' and its (anti)hero by Evelyn Rill
Cover of the book How is Constructivism Needed to Explain the Enlargement of the European Union? (Case Study: Turkey) by Evelyn Rill
Cover of the book The Trials of Oscar Wilde by Evelyn Rill
Cover of the book Analysis of different rewards at ABC House to improve employee's performance by Evelyn Rill
Cover of the book 'Geschmäcker lassen sich nicht globalisieren' by Evelyn Rill
Cover of the book The Financial Crisis in Russia 1998 by Evelyn Rill
Cover of the book The Revolutionary Spirit? Egalitarianism and Elitism in Melville's 'White Jacket' by Evelyn Rill
Cover of the book The use of Audio Aids in the EFL class at the tertiary level - a plus or a minus? by Evelyn Rill
Cover of the book 'Take Pity' by Bernard Malamud by Evelyn Rill
Cover of the book Constitutions in Transition - Tendencies in European Constitutional Law after the Fall of Communism by Evelyn Rill
Cover of the book Lawful and unlawful combatants by Evelyn Rill
Cover of the book Globalization, Global Migration and its impact on a regional level by Evelyn Rill
We use our own "cookies" and third party cookies to improve services and to see statistical information. By using this website, you agree to our Privacy Policy