Fractal markets hypothesis and Principal: Difference between pages

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(FMH).
#In agency law, an individual or other legal person represented by an agent.
#In law, a legal person acting on their own behalf.
#The amount of an investment or a loan, excluding any interest. When the whole of a loan is drawn down at the start, the principal is simply the amount originally borrowed.
#The reference amount of a traded financial instrument, used to determine its future cashflows.
#Most important, or largest.  


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.


The concepts of 'principal' above, should not be confused with ''principle'', which is different.




== See also ==
== See also ==
 
* [[Acceleration]]
* [[Efficient market hypothesis]]
* [[Agency]]
* [[Behavioural economics]]
* [[Agent]]
* [[Market risk]]
* [[Arm’s length principle]]
 
* [[Coupon rate]]
[[Category:Corporate_financial_management]]
* [[Dual currency bond]]
[[Category:Financial_risk_management]]
* [[Endowment]]
* [[Foreign currency bond]]
* [[Forward forward contract]]
* [[Interest]]
* [[Non-performing loan]]
* [[Paying agent]]
* [[Point]]
* [[Self-financing loan]]
* [[Separate personality principle]]
* [[Annuity factor]]
* [[Instalment]]

Revision as of 05:53, 22 August 2017

  1. In agency law, an individual or other legal person represented by an agent.
  2. In law, a legal person acting on their own behalf.
  3. The amount of an investment or a loan, excluding any interest. When the whole of a loan is drawn down at the start, the principal is simply the amount originally borrowed.
  4. The reference amount of a traded financial instrument, used to determine its future cashflows.
  5. Most important, or largest.


The concepts of 'principal' above, should not be confused with principle, which is different.


See also

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