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.
Which is associated to Sharpe Ratio?
Illustrates an example of GARCH.
What is Vega?
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What is an LBO (leveraged buyout)? Explain the risks and the potential rewards for the equity investors.
Researchers found that this is very hard to forecast the future exchange rates more precisely than the forward exchange rate or the current spot exchange rate. How would you interpret this?This implies that exchange markets are informationally e
Can I employ real probabilities for pricing derivatives? Answer: Yes you can. But you may require moving away from classical quantitative finance.
What are the real differences between the partial differential equations?
Do option traders use the Black–Scholes formula?
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