Fractal markets hypothesis and Inverse yield curve: Difference between pages

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imported>Doug Williamson
m (Amended Efficient market hypothesis link.)
 
imported>Doug Williamson
(Mention falling yield curve expressly.)
 
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(FMH).
A situation in which market interest rates for longer term funds are lower than those for shorter maturities.
 
The fractal markets hypothesis is an evolving model of investor and market behaviour which identifies repeating patterns in market prices and conditions.
 
The FMH may explain why extreme negative (and positive) outturns are observed more frequently in real financial markets than predicted by simpler efficient market models.
 
 
Under the FMH, a key contributory factor is the difference in investment time horizons between different classes of market participants.
 
 
If the FMH is borne out in practice, then real financial markets are significantly less stable than predicted and described by more traditional market models.


Also known as a negative yield curve or a falling yield curve.




== See also ==
== See also ==
 
* [[Negative yield curve]]
* [[Efficient market hypothesis]]
* [[Phillips curve]]
 
* [[Yield curve]]
* [http://www.bankofengland.co.uk/publications/Pages/fsr/fs_paper23.aspx Bank of England Financial Stability Paper No 23]
 
[[Category:Capital_Markets_and_Funding]]
[[Category:Risk_Management]]

Revision as of 14:54, 13 November 2015

A situation in which market interest rates for longer term funds are lower than those for shorter maturities.

Also known as a negative yield curve or a falling yield curve.


See also