Sharpe ratio making sense when Central Limit Theorem given
How is Sharpe ratio making sense when Central Limit Theorem is valid?
Expert
We also recognize from the Central Limit Theorem that when you have various investments all that matters is the mean and the standard deviation. Therefore, as long as the CLT is valid the Sharpe ratio makes sense.
The Sharpe ratio has been criticized for attaching equal weight to upside ‘risk’ as downside risk because the standard deviation incorporates in both its calculation. It may be important when returns are much skewed.
Explain all the model and experiments of Robert Merton.
Describe the relation between net present value and the value of the firm?
What are the characteristics of an efficient market?
Give any benefits you can think of for any company to source new equity capital from foreign investors in addition to domestic investors. An enhancement in demand will normally increase the stock price and develop
Illustrates a case of a static arbitrage and model-independent arbitrage?
What can a financial institution frequently do for a DEU (deficit economic unit) that it would have trouble doing for itself if the DEU were to deal directly with SEU?
How is hedging requirement decreased by a gamma-neutral strategy?
Explain the purpose of alpha and beta in Capital Asset Pricing Model.
Explain in detail stock dividends and stock splits affect the common stock’s market price. Also explain why a firm declares stock dividends and stock splits?
factors of the growth of the margin market in recent years
18,76,764
1929381 Asked
3,689
Active Tutors
1459051
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!