How must you hedge discretely
How must you hedge discretely?
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First, acquire your delta correct, and this implies use the correct formula and estimates for parameters, like volatility. Second, decide while to hedge based on the conflicting desires of wanting to hedge as frequently as possible to reduce risk, but so little as possible to decrease any costs related with hedging.
Explain the term NGARCH as of the GARCH’s family.
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Suppose today's settlement price on a CME DM futures contract is $0.6080/DM. You have a short position in one contract. Your margin account presently has a balance of $1,700. The next three days' settlement prices are $0.6066, $0.6073, & $0.5989. Compu
Example of Forward and Backward Equations.
What is super hedging?
Explain the experiment of Oldrich Vasicek of short-term interest rate.
What is the Volatility Smile?
Where can we get incomplete markets?
Illustrates an example of delta hedging.
Explain the poisson processes.
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