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.
Explain all the model and experiments of Robert Merton.
Illustrates an example of Greeks?
Will the cost of equity be zero if dividends paid to common stockholders will not be legal obligations of a corporation?
Define the term pricing derivatives in Monte Carlo simulations.
Explain in brief the accumulated depreciation?
Illustrates an example of probability of coin willing to bet?
How is the option hedged?
Does LMM stand for? Explain.
In which measurement semi-variance mathematical definition of risk is used?
What is rehedging the portfolio?
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