Problems with real probabilities to price derivatives
What are the main problems with real probabilities to price derivatives?
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Two main problems are there with it.1. You need to be capable to measure real probabilities. 2. You need to decide on a measure of risk aversion or a utility function.
Explain the deterministic volatility in an option-pricing.
How is gamma measure the rehedged position?
Stock price is $98; and European call option struck at $100 along with an expiration of nine months has a value of $9.07. There nine-month, compounded continuously, interest rate is 4.5%. So find out the value of the put option with the same strike and expirat
Show how Kareem's WACC would change if the tax rate dropped to 25 percent and the estimated cost of equity capital were based on a risk-free rate of 7 percent, a market risk premium of 8 percent, and a systematic risk measure or beta of 2.0.
What is MCC (marginal cost of capital schedule)? The schedule is always a horizontal line. Elaborate.
Review a current article on strategic planning from a business journal. The article should have been published within the last 3 years. The review is to include full bibliographical information for the article being reviewed and any other referenced material; discuss in scholarly detail a summary of
How is a Sharpe ratio maximized? Answer: Choosing the portfolio which maximizes the Sharpe ratio, will provide you the Market Portfolio.
Define market participants in the foreign exchange market?The market participants which comprise the FX market can be categorized in five groups: international banks, non-bank dealers, bank customers, FX brokers, and central banks. Internation
What are the difficulties GARCH contained?
What are the advantages and limitations of a new stock issue?
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