Illustrates an example of Co-integration
Illustrates an example of Co-integration?
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Assume you have two stocks S1 and S2 and you get that S1 − 3 S2 is stationary; therefore this combination never strays more far from its mean. When one day it ‘spread’ is mainly large then you would have sound statistical reasons for thinking as spread might shortly decrease, giving you a possible source of statistical arbitrage profit. It can be the basis for pairs trading.
Explain risk in various forms.
What are the difference between Capital Asset Pricing Model and Markowitz’s Modern Portfolio Theory?
How is a Sharpe ratio maximized? Answer: Choosing the portfolio which maximizes the Sharpe ratio, will provide you the Market Portfolio.
When we can use Finite difference numerical method?
What is the validity of the Efficient-market hypothesis?
How will Marking to market put some rationality back in trading?
Explain Quants’ salaries through a survey.
How many forms are in Margin Hedging contained?
Why a different type of mathematics in Quantitative Finance is important?
Describe the basic operation of a currency forward market The forward market is an OTC market in which the forward contract for purchase or sale of foreign currency is tailor-made among the client and its international bank. No money changes ha
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