Illustrates an example of Co-integration
Illustrates an example of Co-integration?
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Assume you have two stocks S1 and S2 and you get that S1 − 3 S2 is stationary; therefore this combination never strays more far from its mean. When one day it ‘spread’ is mainly large then you would have sound statistical reasons for thinking as spread might shortly decrease, giving you a possible source of statistical arbitrage profit. It can be the basis for pairs trading.
What are possible ways of marking exotic or over-the-counter contracts?
Explain probabilities and statistics for quantifying risk in finance.
Staind, Inc., has 7 percent coupon bonds on the market that have 13 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 11 percent, what is the current bond price?
One can state that the Bretton Woods system was programmed to an eventual demise. Remark on this proposition.The answer to this question is associated to the Triffin paradox. Under gold-exchange system, the reserve-currency country must run BOP
9. Define: a) Conversion ratio b) Conversion value c) Straight bond value in relation to a convertible bond.
What is interest-rate model?
Should you place all your money in a stock which has low risk but also low expected return, or one along with high expected return but that is far riskier or maybe divide your money among the two?
Explain the term Serial Autocorrelation.
Explain the term Linear or non-linear in finite-difference methods.
Explain in brief the difference between financial risk and business risk?
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