Explain what is a Monte Carlo method
Explain what is a Monte Carlo method?
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This method simulates the random behaviour underlying the financial models. Therefore, in a sense they find right to the heart of the problem. Always keep in mind that, while pricing you should simulate the risk-neutral random walks, the value of a contract is then the ordinary present value of all cash flows.
Hebner Housing Corporation consist of forecast the given numbers for the upcoming year as follows: • Net income = 180,000. • Sales = $1,000,000. &b
Otobai Motor Company is currently paying a dividend of $1.40 per year. The dividends are expected to grow at a rate of 18% for the next three years and then a constant rate of 5% thereafter forever. What is the vlaue of its current stock price? Assuming that the discount rate is 10%.{Hint: pages 84-
Illustrates an example of probabilities in a simple coin-tossing experiment.
Explain the difference between mortgage bond and a debenture?
What are the risks associated with using a large amount of short-term financing for working capital?
What is Kelly Fraction? Explain.
What is Volatility? Answer: It is annualized standard returns’ deviation.
What is Vanna in option value?
Explain distribution of individual numbers or random numbers.
What are the primary requirements for a successful JIT inventory control system?
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