What are statistical or macroeconomic factors
What are statistical or macroeconomic factors?
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In practice we can select the factors to be statistical or macroeconomic. Here are several possible macroeconomic variables as follows:• An index level• GDP development• An interest rate or may two• A default spread upon corporate bonds• An exchange rate.Statistical variables originate from an analysis of a covariance of asset returns. By this one extracts the factors by several suitable decompositions.
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Given: price of Nokia shares on the Helsinki stock exchange=12 euros, exchange rate=$1.3/euro, price of the ADR on the NYSE=$15 and each foreign share translates into 1 ADR. Show the actions you would take to make risk free arbitrage profits.
Boeing Company is expecting to have EBIT next year of $10 million, with a standard deviation of $5 million. Boeing has $40 million in bonds with coupon of 8%, selling at par, which are being retired at the rate of $3 million annually. Boeing also has 200,000 shares of preferred stock, which pays ann
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From books of Aggarwal Bors, following information has been extracted: Rs. Sales 2,40,000 Variable costs 1,44,000 Fixed costs 26,000 Profit before tax 70,000 Rate of tax 40% Firm is proposing to buy the new plant that could generate extra annual profit of Rs. 10,000. The fixed cost of new plant is e
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