Why mathematics in Quantitative Finance is important
Why a different type of mathematics in Quantitative Finance is important?
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The real-world subject of quantitative finance uses tools from various branches of mathematics. And financial modelling can be approached in a variety of various ways. For several strange reason the advocates of various branches of mathematics find quite emotional while discussing the demerits and merits of their methodologies and those of their ‘opponents.’
What is Knight in finance theory?
A stock whose value is now $44.75 is growing on average by 15 percent per annum. Its volatility is 22 percent. The interest rate is 4 percent. You need to value a call option along with a strike of $45, expiring in two months’ time. So, what can you do?
What are statistical or macroeconomic factors?
How can we approximately calculate expected incremental cash flows for a proposed capital budgeting project?
How can stocks are squeezed in the Black–Scholes framework when it falls dramatically?
Why should we assume a deterministic stock price path for an equity option? Answer: Because the forward rate curve is not uniquely determined through the finite set
What is Sharpe ratio?
Define the term XSLT?
Explain the programme of study of Monte Carlo method.
Assume that the treasurer of IBM contains an extra cash reserve of $1,000,000 to invest for six months. The six-month interest rate is 8% per annum in the U.S. and 6% per annum in Germany. Now, the spot exchange rate is DM1.60 per dollar and the six-month forw
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