Explain experiment of Vasicek of short-term interest rate
Explain the experiment of Oldrich Vasicek of short-term interest rate.
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Oldrich Vasicek modelling a short-term interest rate like a random walk and concluded as interest rate derivatives could be valued by using equations the same to the Black–Scholes partial differential equation.
Explain numerical integration in numerical method.
If a convertible bond has a conversion ratio of 20, a coupon rate of 8 percent, a face value of $1,000 and the market price for the company’s stock is $15 per share, what is the convertible bond’s conversion value?
What is Grossman–Stiglitz paradox says?
Illustrates an example of distribution of maxima and minima in Extreme Value Theory?
Illustrates an example of Option Adjusted Spread. Answer: Analyses by using Option Adjusted Spreads are common within Mortgage-Backed Securities (MBS).
Explain Strong-form efficiency in Efficient Markets Hypothesis.
What is Coherent Measure?
Explain when standard deviation is not relevant?
What is Monte Carlo Simulation?
What is the role of earnings and cash while a corporation is deciding how much cash dividends to give to common stockholders?
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