EECS 3101 Lecture 7: EECS 3101 Lecture 7 Notes
28 Jun 2018
School
Course
Professor
EECS 3101 Lecture 7 Notes
Introduction
Impact of Alliances
In contrast, traders on the floor can execute some trades in ways that favor themselves
at the expense of investors.
Several stock exchanges have created international alliances with the stock exchanges
of other countries, thereby enabling firms to more easily cross-list their shares among
various stock markets.
This gives investors easier and cheaper access to foreign stocks.
The alliances also allow greater integration between markets.
At some point in the future, there may be one global stock market in which any stock of
any country can be easily purchased or sold by investors around the world.
A single global stock market would allow U.S. investors to easily purchase any stock,
regardless of where the corporation is based or the currency in which the stock is
denominated.
The international alliances are a first step toward a single global stock market.
The costs of international stock transactions have already been substantially reduced as
a result of some of these alliances.
Reduction in Information Costs
The Internet provides investors with access to extensive information about foreign
stocks, enabling them to make more informed decisions without having to purchase
information about these stocks.
Consequently, investors should be more comfortable assessing foreign stocks.
Although differences in accounting rules still limit the degree to which financial data
about foreign companies can be accurately interpreted or compared to data about firms
in other countries, there is some momentum toward making accounting standards
uniform across some countries.
Document Summary
In contrast, traders on the floor can execute some trades in ways that favor themselves at the expense of investors. The internet provides investors with access to extensive information about foreign stocks, enabling them to make more informed decisions without having to purchase information about these stocks. Traders on the floor can execute some trades in ways that favor themselves at the expense of investors. Several stock exchanges have created international alliances with the stock exchanges of other countries, thereby enabling firms to more easily cross-list their shares among various stock markets. This gives investors easier and cheaper access to foreign stocks. The alliances also allow greater integration between markets. At some point in the future, there may be one global stock market in which any stock of any country can be easily purchased or sold by investors around the world.
