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CDS spreads as a measure of risk

CDS spreads as a measure of risk

The definition of CDS A CDS is known in the financial world as a credit default swap . Because it has a simple structure and flexible conditions, banks and investors use it in order to hedge their exposure to credit risk. It can be considered as a sort...

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The Equity Risk Premium

The Equity Risk Premium

The equity risk premium (ERP) is defined by Goetzmann and Ibbotson (2006) as “the extra return needed to induce investors to risk their money in the stock market”. Thus, it is the difference between stock returns and returns on a risk free investment....

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The FOREX market

The FOREX market

Overview The Foreign Exchange Market, also known as FOREX or FX market, is the largest of all financial markets. In 2007, the average daily volume of transactions on this market was equivalent to $3200 billion (BIS, 2007), three times the volume of all...

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What is a market economist?

What is a market economist?

Where should a company set its production plans and what are the main market risks associated to this project? Will the economy experience a recovery in 2010? Etc. Economists try to answer this kind of questions by studying statistics, testing models...

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