What is a mathematical definition of risk
What is a mathematical definition of risk?
Expert
A starting point for a mathematical definition of risk is simply as standard deviation. It is sensible due to the results of the Central Limit Theorem (CLT), that when you add up a large number of investments what matters so far as the statistical properties of the portfolio are only the expected return and the standard deviation of individual investments, and the resulting portfolio returns are certainly normal distributed.
The normal distribution being symmetrical regarding the mean, the potential downside can be measured in order of the standard deviation.
You have one hat containing normally distributed random numbers, with a mean of zero and a standard deviation of σ which is unknown. You draw N numbers φi from this hat. What is the ‘probability’ of drawing all of the numbers &ph
Explain in brief about financial ratio?
Define the term correct delta with an example?
How many forms are in Margin Hedging contained?
Describe difference between the retail or client market and the wholesale or interbank market for foreign exchange?The market for foreign exchange can be distinguished as two-tier market. One tier is the wholesale or interbank market and the ot
Explain Girsanov’s Theorem in briefly.
Is volatility constant?
Janice Colangelo heads the Training Centre of the large HR Consulting firm EMT Consulting. The firm has three major departments: Recruitment, Training and Career Services. The Training Centre provides management training for employees of various businesses. Recruitment provides recruitment service
Explain how is exposed model risk of Delta hedging is reduced by static hedging.
Why is traditional, simple VaR measurement not coherent?
18,76,764
1933526 Asked
3,689
Active Tutors
1439759
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!