How two stocks fully correlated over short timescales
How two stocks fully correlated over short timescales?
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Two stocks may be completely correlated over short timescales until now diverge in the long run, with one growing and another decaying. On the other hand, two stocks may follow each other, never being additional than an exact distance apart, but along with any correlation, negative, positive or varying. When we are delta hedging then maybe the short timescale correlation issues but not, if we are holding stocks for a long time in unchanged portfolio. To notice whether two stocks stay close together we require a definition of stationarity.
If the cost benefit of interest rate swaps would probably be arbitraged away in competitive markets, what other explanations present to explain the rapid development of the interest rate swap market?All kinds of debt instruments are not always o
Example of Girsanov’s Theorem.
Mr. James K. Silber, an avid international investor, only sold a share of Rhone-Poulenc, a French firm, for FF50. The share was bought for FF42 year ago. Now the exchange rate is FF5.80 per U.S. dollar and was FF6.65 per dollar a year ago. Mr. Silber attained
Presently, the spot exchange rate is $1.50/£ and the three-month forward exchange rate is $1.52/£. The interest rate of three month is equal to 8.0% per annum in the U.S. & 5.8% per annum in the U.K. One can borrow as much as $1,500,000 o
Explain the formula of hedging contract.
Explain the common pattern of cash flows from a bond with a positive coupon rate.
Explain degree of confidence and the relationship along with deviation.
What is the Miller and Modigliani theory of dividends?
What is the Kelly Criterion?
When the quantitative finance is disrepute?
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