Insider Trading. Insider trading is a poorly defined concept with roots in adverse selection theory and the efficient market hypothesis (EMH). The popular notion is that insiders have an unfair advantage because they possess materially significant and non-public information â an informational asymmetry.
In format, a letter of guarantee is normally a short document that addresses a specific transaction. The text contains data that establishes the identity of the buyer, his or her relationship with the bank, and the nature and general value of the asset that is pledged as collateral.
BREAKING DOWN 'Bank Guarantee' A bank guarantee is a lending institutionâs promise to cover a loss if a borrower defaults on a loan. The guarantee lets a company buy what it otherwise could not, helping business growth and promoting entrepreneurial activity. For example, Company A is a new restaurant wanting to buy $3 million in kitchen equipment.