Difference between complete market and binomial models
What are the difference between complete market and binomial model?
Expert
In the complete market you can replicate derivatives along with the simpler instruments. Although you can also turn it on its head in order that you can hedge the derivative along with the underlying instruments to make a risk-free instrument. Within the binomial model you can replicate an option by stock and cash, or you can hedge the option along with the stock to make cash. Similar idea, similar equations, just move terms to be on various sides of the ‘equals’ sign.
Which factors are important when implementing a Monte Carlo Method?
Explain in brief about financial ratio?
An optimal capital structure exists, explain the reasons. Why very small amount of debt is as undesirable as is very big amount debt?
Opportunity costs affect the capital budgeting decision-making process. Explain.
What kind of insurance organisations usually takes on the greater risks: a life insurance company or casualty insurance company and a property?
Illustrates an example of distribution of individual numbers or random numbers.
Why might it be easier for an investor wishing to diversify his portfolio internationally to purchase depository receipts instead of the actual shares of the company?A depository receipt can be purchased on the investor's domestic exchange. It
Which ratios the bankers are most interested in while considering whether to grant a short-term business loan?
What is Sortino Ratio?
What is rehedging the portfolio?
18,76,764
1927295 Asked
3,689
Active Tutors
1440997
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!