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 an example of Brownian motion, where it is used.
Whereas you were visiting London, you purchased a Jaguar for £35,000, payable in three months. You have sufficient cash at your bank in New York City that pays 0.35% interest per month, compounding monthly, to pay for the car. At present, the spot exchan
Which factors are important when implementing a Monte Carlo Method?
Illustrates an example of Monte Carlo Simulation?
Janice Colangelo heads the Training Centre of the large HR Consulting firm EMT Consulting. The firm has three major departments: Recruitment, Training and Career Services. The Training Centre provides management training for employees of various businesses. Recruitment provides recruitment service
From books of Aggarwal Bors, following information has been extracted: Rs. Sales 2,40,000 Variable costs 1,44,000 Fixed costs 26,000 Profit before tax 70,000 Rate of tax
Why do analysts calculate financial ratios?
Give explanation: The banks try to make short-term self-liquidating loans to businesses.
Explain in brief capital rationing? What are reasons that a firm should practice capital rationing?
How many prices have in practice option for put–call parity?
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