Complete and incomplete market in term of probabilistics
What is complete market and incomplete market in term of probabilistic?
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In probabilistic terms we can say as in a complete market there a unique martingale measure is exists, but for an incomplete market there are not unique martingale measures. The interpretation of it is that even if options are risky instruments in complete markets we don’t have to identify our own degree of risk aversion to price them.
Remark on the following statement: "As the U.S. imports more than it exports, it is essential for the U.S. to import capital from foreign countries to finance its present account deficits."The statement presupposes that the U.S. present account
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Foreign Exchange (FX): It is the exchange of one currency for other or the transformation of one currency into another currency. Foreign exchange too refers to the global market where currencies are traded virtually all around-the-clock. The word fore
Why Does Risk-Neutral Valuation Work?
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