Are Debt Investors Different from Equity Investors?
richardfield.substack.com
Since the acute phase of the Great Financial Crisis began in 2008, Economists (broadly defined to include finance professors) and legal scholars have argued debt investors are different from equity investors. What is the difference? Debt investors buy securities, particularly money market securities, that are designed to be insensitive to information. Equity investors buy securities that are always sensitive to information (see the Efficient Market Hypothesis and the idea all publicly available information is reflected in the price).
Are Debt Investors Different from Equity Investors?
Are Debt Investors Different from Equity…
Are Debt Investors Different from Equity Investors?
Since the acute phase of the Great Financial Crisis began in 2008, Economists (broadly defined to include finance professors) and legal scholars have argued debt investors are different from equity investors. What is the difference? Debt investors buy securities, particularly money market securities, that are designed to be insensitive to information. Equity investors buy securities that are always sensitive to information (see the Efficient Market Hypothesis and the idea all publicly available information is reflected in the price).