What is Grossman–Stiglitz paradox says
What is Grossman–Stiglitz paradox says?
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The Grossman–Stiglitz paradox says that if a market were efficient, reflecting all available information, then there would be no incentive to get the information on that prices are based. Fundamentally the job has been done for everyone. It is seen while one calibrates a model to market prices of derivatives, without still studying the statistics of the underlying process.
Illustrates a swap dealer. A swap dealer is a market maker of swaps and supposes a risk position in matching opposite sides of a swap and in assuring that each of counterparty fulfils its contractual compulsion to
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