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 swap broker ? A swap broker arranges a swap among two counterparties for fee without taking a risk position within the swap.
Illustrates an example of real probabilities to price derivatives?
What will an investment banker do while underwriting a new security issue for a corporation?
What are the difference between complete market and binomial model?
On the contrary to the U.S., Japan has felt continuous current account surpluses. What could be the foremost causes for these surpluses? Is it desirable to have continuous current account surpluses? Japan's continu
What is Kelly Fraction? Explain.
Describe the concept of the world beta of a security.The world beta measures the sensitivity of returns to security to returns to the world market portfolio. This is a measure of the systematic risk of the security in global setting. Statistically, the world beta can be des
Is it possible for a company with a positive net income and which does not distribute dividends to find itself in suspension of payments?
What is the Black–Scholes Equation?
Explain Girsanov’s Theorem in briefly.
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