Explain exotic or over-the-counter contracts
Explain exotic or over-the-counter (OTC) contracts.
Expert
These are not traded actively; they may be unique to you and your counterparty. These instruments need to be marked to model. And this clearly raises the question of that model to use. Generally in this context the ‘model’ implies the volatility, whether in FX or fixed income and equity markets.
What is Volatility? Answer: It is annualized standard returns’ deviation.
Why do analysts calculate financial ratios?
If a convertible bond has a conversion ratio of 20, a coupon rate of 8 percent, a face value of $1,000 and the market price for the company’s stock is $15 per share, what is the convertible bond’s conversion value?
Explain normal distribution model proposed by Louis Bachelier.
Explain the uncertain volatility.
Explain the important properties of Brownian motion.
Why cash flows and accounting profits are not considered the same thing.
Describe Euronote marketEuronotes are short-term notes written through a group of international investment or commercial banks termed a “facility.” A client-borrower makes an agreement along with a facility to issue Euronotes i
Explain distribution of individual numbers or random numbers.
Explain the tool of Approximations methods in Quantitative Finance.
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