How is estimate of volatility or the implied volatility used
How is estimate of volatility or the implied volatility used?
Expert
When you hedge options you have to select whether to utilize a delta based on your own estimate of volatility or the implied volatility. If you need to ignore fluctuations in your mark-to-market P and L you will hedge by using the implied volatility, even if you may believe this volatility to be incorrect.
What is the weight in the weighted average cost of capital?
What is implied volatility? Answer: Implied volatility is number into the Black–Scholes formula which makes a theoretical price equal a market price.
Why do Quants like Closed-Form Solutions?
What is cardinal utility?
Under what circumstances will warrant’s value be high? Explain.
What considerations might restrict the extent on which the theory of comparative advantage is realistic?Originally the theory of comparative advantage was advanced by the nineteenth century economist David Ricardo as an explanation for why natio
How is hedging optimized when transaction costs are there?
Explain Capital Asset Pricing Model (CPM).
When is the close relationship breaks-down in hedging reasons?
Differentiate in brief a defined benefit and a defined contribution pension plan.
18,76,764
1949733 Asked
3,689
Active Tutors
1417681
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!