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What is adverse selection? The market is supposed to self-regulate and to be a perfect meeting place between supply and demand. This may however sometimes show signs of failure. For example, you want to buy a used car costing around €2,000 on the market. You then meet someone who offers to sell you the model […]

 What is marginalism? Marginalism comes from the concept of value. The greatest classical economists such as Adam Smith, mentioned that the value of a good depends on the number of hours of work needed for its manufacture. In the nineteenth century, other economists such as Alfred Marshall argued that it is in fact the usefulness […]

What is moral hazard? When a banker decides to lend money, he does not always know how the money will be used, but he will set an interest rate. The client is often the only one who knows how this money will be used, but having obtained a fixed rate with repayments fixed to start […]

What is an efficient market? The efficient-market hypothesis was developed by Eugene Fama between the 1950s and 1960s. This hypothesis assumes that when a market is sufficiently developed, and that the information in that market is known by all the players, who are all rational, it will react almost instantly and properly. Interpretation of the […]

What is a portfolio manager? Portfolio managers work for investors who entrust them with funds to invest on the financial markets. They make investment decisions concerning the allocation of funds within the portfolio. To do this they must analyse the macro-economic, fundamental and quantitative aspects of the assets so they can choose which ones to […]

What is a seller on the financial markets? Sellers on the financial markets, are intermediaries between traders and their clients. Sellers work together with market maker traders and are responsible for client relationships. Sellers on financial markets are the ones who really know the clients, their needs, their resources, etc. Specifically, when clients call to […]

What is Marxism? Exploitation exists because of capitalistic profit because it imposes profit. To explain the market Marx argued that each commodity had 2 final values. Firstly the use value that corresponds to the value of the product’s utility, that is to say the use that is made of this product. Secondly is the exchange […]