What is jump-diffusion model
What is jump-diffusion model?
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While a model has both a Wiener process dX term and a Poisson process dq term this is termed as a jump-diffusion model.
How is Information Ratio calculated?
Based on the information below, calculate the weighted average cost of capital. Great Corporation has the following capital situation. Debt: One thousand bonds were issued five years ago at a coupon rate of 10%. They had 25-year terms and $1,000 face values. They are now selling to yield 9%. Th
Illustrates an example of term bootstrapping? Answer: know the market prices of bonds all along with one, two three or five years to maturity. So, you are asked to v
Explain the formula of hedging contract.
In order for a derivatives market to function two kind of economic agents are required: hedgers & speculators. Describe.Two kinds of market participants are essential for the operation of a derivatives market: speculators & hedgers.
Describe how exchange rate fluctuations influence the return from a foreign market measured in dollar terms. Describe the empirical evidence on the effect of exchange rate uncertainty on the risk of foreign investment.Mostly exchange rate fluctu
Describe a full definition of arbitrage. Arbitrage can be described as the act of simultaneously buying & selling the similar or equivalent assets or commodities for the reason of making certain, guaranteed pro
Explain functional form of coefficients in Monte Carlo method.
Explain probability of some buses having arrived when the Poisson process is utilized.
What are the benefits of “paying late” and how do companies try to do this?
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