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Financial Terms | |
Asymmetric information |
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Definition of Asymmetric informationAsymmetric informationinformation that is known to some people but not to other people.
Related Terms:Capital market imperfections viewThe view that issuing debt is generally valuable but that the firm's Asymmetric taxesA situation wherein participants in a transaction have different net tax rates. Expected value of perfect informationThe expected value if the future uncertain outcomes could be known Future-Oriented Financial Informationinformation about prospective results of operations, financial position and/or changes in financial position, based on assumptions about future economic conditions and courses of action. Future-oriented financial information is presented as either a forecast or a projection. informationbits of knowledge or fact that have been carefully Information asymmetryA situation involving information that is known to some, but not all, participants. Information Coefficient (IC)The correlation between predicted and actual stock returns, sometimes used to ![]() Information-content effectThe rise in the stock price following the dividend signal. information content of dividendsDividend increases send good news about cash flow and earnings. Dividend cuts send bad news. Information costsTransaction costs that include the assessment of the investment merits of a financial asset. Information-motivated tradesTrades in which an investor believes he or she possesses pertinent Information servicesOrganizations that furnish investment and other types of information, such as Informational efficiencyThe speed and accuracy with which prices reflect new information. Informationless tradesTrades that are the result of either a reallocation of wealth or an implementation of an Insider informationRelevant information about a company that has not yet been made public. It is illegal for management information system (MIS)a structure of interrelated elements that collects, organizes, and communicates ![]() Medical Information BureauThis organization was established in 1902. The Medical information Bureau (M.I.B.) is a non-profit association of life insurance companies. Its purpose is to detect and deter fraud by providing warnings called, alerts, to member companies. For example, if an insurance applicant advised one insurance company of a heart attack and then applied to another insurance company omitting this history, codes, reported by the first insurance company, indicating a heart attack would alert the second insurance company to the undisclosed history. It is a rarity, however, that the alert is the only notice of a specific medical impairement as most applicants completely disclose their history. Signaling approachApproach to the determination of the optimal capital structure asserting that insiders in a Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |