What is actuarial approach in Central Limit Theorem
What is actuarial approach in Central Limit Theorem?
Expert
The actuarial manner is to look at pricing in several average senses. Even though you can’t hedge the risk from each option this doesn’t necessarily issue in the long run. Since in that long run you will have made many hundreds or thousands of option trades, therefore all that really issues is what the average price of each contract must be, even though it is dangerous. To some extent it relies on results by the Central Limit Theorem. It is termed as the actuarial approach as it is how the insurance business works. You cannot hedge the lifespan of individual policyholders although you can figure out what will occur to hundreds of thousands of them on average by using actuarial tables.
Explain in brief about financial ratio?
What is Vanna in option value?
Explain the term Linear or non-linear in finite-difference methods.
What are the primary requirements for a successful JIT inventory control system?
Illustrates an example relates with risk that defined in mathematical terms.
Illustrates an example of probability of coin willing to bet?
Determine the efficiency of finite differences?
How approximately is future profit calculated?
Explain the difference between simple and complicated formula of value at risk.
How is Sharpe ratio making sense when Central Limit Theorem is valid?
18,76,764
1957185 Asked
3,689
Active Tutors
1458746
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!