Social Sciences, asked by tommilan888, 11 months ago

impact of market and exchange in the community

Answers

Answered by tpprparidhi
1
it help in growth or development of the community
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Answered by gokulavarshini
1
Market impact can arise because the price needs to move to tempt other investors to buy or sell assets (as counterparties), but also because professional investors may position themselves to profit from knowledge that a large investor (or group of investors) is active one way or the other. Some financial intermediaries have such low transaction costs that they can profit from price movements that are too small to be of relevance to the majority of investors.
The financial institution that is seeking to manage its market impact needs to limit the pace of its activity (e.g., keeping its activity below one-third of daily turnover) so as to avoid disrupting the price.

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