Explain the second way of calibration
Explain the second way of calibration if we can’t measure that parameter.
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Another method is to assume, efficiently, that there is information in the market prices of traded instruments. Here in example we ask what volatility we should put in a formula to find the ‘correct’ price of $19. We then utilize that number to price other instruments. There In that case we have calibrated our model to an instantaneous snapshot of the market on one moment in time, quite than to any information by the past.
How is a Sharpe ratio maximized? Answer: Choosing the portfolio which maximizes the Sharpe ratio, will provide you the Market Portfolio.
Describe the present economic crisis situation in Europe.
Company A is a AAA-rated firm wanting to issue five-year FRNs. It determines that it can issue FRNs at six-month LIBOR + 1/8 percent or at the six-month Treasury-bill rate + ½ percent. Specified its asset structure, LIBOR is the preferred index. Comp
Find out expected return at last asset when return on the index and slandered devotion is given?
Why is Crash Metrics good risk tool?
Illustrates that the put–call parity is a model-independent relationship.
Explain the interpolation techniques.
What will be the effect on riskiness of a portfolio if assets with negative correlations (even very low correlations) are taken together?
Tabulate the advantages of the flexible exchange rate regime. The advantages of the flexible exchange rate system comprise: (I) automatic attainment of balance of payments equilibrium and (ii) maintenance of national policy autonomy.
What is Sub-additivity?
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