Explain diversifiable risk and undiversifiable risk
How are diversifiable risk and undiversifiable risk associated with portfolio?
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The contribution from the uncorrelated εs to the portfolio vanishes as we increase the number of assets in the portfolio; it is the risk related with the diversifiable risk. The remaining risk, that is correlated with the index, it is the undiversifiable systematic risk.
Differentiate in brief a defined benefit and a defined contribution pension plan.
Illustrates an example of Co-integration?
What is shadow Greeks?
Your firm have just issued five year floating-rate notes indexed to six-month U.S. dollar LIBOR plus 1/4%. Describe the amount of first coupon payment your firm will pay per U.S. $1,000 of face value, if six-month LIBOR is at present 7.2%?Solution:
What are the modern approaches uses for forecast volatility and model?
What is dynamically hedge?
How is Sharpe ratio making sense when Central Limit Theorem is valid?
Explain numerical integration in numerical method.
Depict the risks confronting an interest rate & currency swap dealer.An interest rate & currency swap dealer confronts several distinct types of risk. Interest rate risk refers to interest rates altering unfavourably before the swap dea
The discussion of zero-coupon bonds in the text gave an instance of two zero-coupon bonds issued through Commerzbank. The DM300, 000,000 issues due in the year of 1995 sold at 50 percent of face value and the DM300, 000,000 due in the year of 2000 sold a
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