We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.
We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.
Published online by Cambridge University Press: 09 February 2017
So far, information has not really played much of a role in deriving all the basic ideas in finance that we have encountered so far (net present value, portfolio theory, capital structure, and option pricing). However, assumptions on information underlie many of these ideas. Specifically, most of the ideas that we have derived have been based on the assumption of symmetric information – everyone has the same information to value the asset. However, this is not a very realistic assumption. In the last two chapters in this book, we explicitly turn to the role information plays in setting prices for transactions. In this chapter, we are going to allow for the possibility that the buyer and seller of any asset have different information regarding the true value of an asset. In this case, who is better off?
To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.
Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
Find out more about the Kindle Personal Document Service.
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.
