What did better mean specified by portfolio selection
What did ‘better’ mean specified with Markowitz questioned regarding portfolio selection?
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Markowitz answered a portfolio’s possible future performance in orders of its expected return and also its standard deviation. The last was to be interpreted as its risk. He demonstrated how to optimize a portfolio to provide the maximum expected return for a specified level of risk. That portfolio was said to be ‘efficient.’ This work later won Markowitz a Nobel Prize for Economics although is problematic to use in practice due to the difficulty in measuring the parameters especially, ‘correlation,’ ‘volatility ’and their instability.
Atlanta Company stock is predicted to follow an exponential growth rate. The relationship among the current stock price P0, future price PT after time T, and continuously compounded rate of the return r, is: PT = P0eγT. The stock doesn’t pay any
Explain the term Option Trading Strategies?
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Which currency has to be utilized in an international acquisition in order to compute the flows?
Straddle & Strangle: In the case of shorting butterfly spread, it can be seen that the gains are limited. However, there exists another strategy known as straddle which produces unlimited gains. This strategy benefits when the trader expects that
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