Explain Weak-form deficiency in Efficient Markets Hypothesis
Explain Weak-form deficiency in Efficient Markets Hypothesis.
Expert
Weak-form efficiency: In weak-form efficiency excess returns can’t be made by using investment strategies based upon historical prices or the other historical financial data. If such form of efficiency is true then this will not be possible to make excess returns using methods like technical analysis. The trading strategy incorporating historical data, like price and volume information, will not systematically outperform a buy-and-hold strategy. This is frequently said that current prices accurately incorporate all historical information, and that current prices are the best estimation of the value of the investment. Therefore prices will respond to news, but when this news is random then price changes will also be random. Means technical analysis will not be profitable.
Explain the term number of dimensions in finite-difference methods.
Consider 8.5 % Swiss franc/U.S. dollar dual currency bonds which pay $666.67 at maturity per SF1,000 of par value. Describe implicit SF/$ exchange rate at maturity? Will the investor be better or worse off at maturity if the real SF/$ exchange rate
Describe necessary condition for a fixed-for-floating interest rate swap to be possible?For fixed-for-floating interest rate swap to be possible it is essential for a quality spread differential to be present. Generally, the default-risk premiu
What is jump-diffusion model?
Explain an example of superhedging.
Calculate the 30-, 90-, & 180-day forward cross exchange rates among the German mark and the Swiss franc by using the most current quotations. Describe the forward cross-rates in "German" terms. The formulas we desire to use are: &n
Illustrates the term serial autocorrelation?
State the term bootstrapping using discount factors.
Explain the term Boundary/final conditions in finite-difference methods.
Why would it be useful to inspect a country's balance of payments data?It would be useful to inspect a country's BOP for at least two reasons. Firstly, BOP provides detailed information regarding the supply & demand of the country's currency
18,76,764
1932995 Asked
3,689
Active Tutors
1457001
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!