Explain exotic or over-the-counter contracts
Explain exotic or over-the-counter (OTC) contracts.
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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.
Explain functional form of coefficients in Monte Carlo method.
What is a mathematical definition of risk?
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?
Explain: warrants are not often exercised unless the time to maturity is small.
Does High operating leverage mean high business risk. Elaborate the statement.
What are the benefits of the (just-in-time) JIT inventory control system?
Explain the denotation a utility function and how it can vary between investors?
How is hedging optimized when transaction costs are there?
What did you meant by the Value of a Contract? Answer: Value usually implies the theoretical cost of building up a new contract by simpler products, such as replicat
Financing costs included into the capital budgeting analysis process. Explain.
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