What is Meant by ‘Complete’ and ‘Incomplete’ Markets
What is Meant by ‘Complete’ and ‘Incomplete’ Markets?
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A complete market is one wherein a derivative product can be artificially made by more fundamental instruments, like cash and the underlying asset. It usually includes dynamically rebalancing a portfolio of the easiest instruments, according to several formula or algorithm, to replicate too complicated product, the derivative. Of course, an incomplete market is one in that you can’t replicate the option along with simpler instruments.
How is Sharpe ratio making sense when Central Limit Theorem is valid?
Would there be positive interest rates on bonds in a world with absolutely no risk (no default risk, maturity risk, and so on)? Why would a lender demand and a borrower be willing to pay, a positive interest rate in such a no risk world?
What are Finite-difference methods?
We attain the following data in dollar terms: The correlation
Why do analysts calculate financial ratios?
Explain the dissimilarities in a cash budget and pro forma financial statements? Why pro forma financial statements are not utilized to forecast cash requirements.
Assume you are a euro-based investor who just sold Microsoft shares which you had bought six months ago. You had invested 10,000 euros to purchase Microsoft shares for $120 per share; the exchange rate was $1.15 per euro. You sold the stock for $135 per share
What is Sharpe ratio?
In brief define each of the major types of international bond market instruments, noting their distinguishing characteristics.The major kind of international bond instruments & their distinguishing characteristics are as follows:
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.
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