--%>
Assignment Help - homework help

What is Sub-additivity

What is Sub-additivity?

E

Expert

Verified

Sub-additivity says that it can only be non-negative. Lack of sub-additivity in a risk measure and that can be exploited can lead to a form of regulatory arbitrage. All a bank has to do is create subsidiary firms, in a reverse form of the above example, to save regulatory capital.

   Related Questions in Financial Management

  • Q : Example of Forward and Backward

    Example of Forward and Backward Equations.

    		•
  • Q : Underwriting a new security issue for a

    What will an investment banker do while underwriting a new security issue for a corporation?

    		•
  • Q : Calculate the rate of return in terms

    Mr. James K. Silber, an avid international investor, only sold a share of Rhone-Poulenc, a French firm, for FF50. The share was bought for FF42 year ago. Now the exchange rate is FF5.80 per U.S. dollar and was FF6.65 per dollar a year ago. Mr. Silber attained

    		•
  • Q : Describe balance of payments identity

    Describe balance of payments identity and explain its implication under the fixed & flexible exchange rate regimes.The balance of payments identity holds that the combined balance on the current & capital accounts have to be equivalent i

    		•
  • Q : Explain the monetary approach to

    Normal 0 false false

  • Q : Which numerical method should you use

    You need to price an option that is paid for within instalments, and you can stop paying and lose the option. Which numerical method should you use?

    		•
  • Q : What is implied volatility What is

    What is implied volatility? Answer: Implied volatility is number into the Black–Scholes formula which makes a theoretical price equal a market price.

    		•
  • Q : Explain boundary/final conditions in

    Explain boundary/final conditions in Monte Carlo method.

    		•
  • Q : Question on interest pay through

    Grecian Tile Manufacturing of Athens, Georgia borrows $1,500,000 at LIBOR and a lending margin of 1.25 percent per annum on six-month rollover basis through London bank.  If six-month LIBOR is 4 ½ percent in the first six-month interval and 5 3/8 percent over the second six-mo

    		•
  • Q : Legal factors that might limit a

    Are there some legal factors that might limit a corporation in its effort to pay cash dividends to common stockholders?

    		•