The effects and regulations of derivatives : a qualitative research of empiric studies and current regulations
MetadataShow full item record
This thesis has focused on how financial derivatives can affect the underlying spot market and how regulatory measures have or have not been sufficient. It is a qualitative thesis in its nature and uses empiric research to show how the theoretic anticipated effects do- or do not come to life. The research is based on four main anticipated effects; on systematic risk, volatility, individual behavior and liquidity. The results are clear and show how systematic risk and volatility did not increase significantly when a derivative trading was introduced on the underlying asset, and how liquidity in the underlying security seemed to increase and decrease in some cases. The concern that derivatives cause declining levels of liquidity in the underlying security is therefore partly intelligible. The effect on individual behavior is controversial and there were evidence on negative effects on individual behavior. It does seem like regulatory measures are in many cases well founded, but its reactive nature is worrying.
Masteroppgave i bedriftsøkonomi - Universitetet i Nordland, 2012