Explain merits and demerits of standard market practice
Explain merits and demerits of standard market practice to find the volatility as a function of underlying.
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On the plus side, it is not too difficult to do in theory. But on the minus side, the practice is much harder, the sought volatility function depending extremely sensitively upon the initial data. From a scientific view point there is much to be said against the methodology.
Stock exchanges: A stock exchange provides services useful for trading, issue and redemption of shares and other securities for traders and brokers. They will also provide facility for payment of income and dividends for listed securities. Securities
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Does it make any sense to compute betas against local indexes while a company has a great part of its operations outside such local market? I have two illustrations: BBVA and Santander.
Atlanta Company stock is predicted to follow an exponential growth rate. The relationship among the current stock price P0, future price PT after time T, and continuously compounded rate of the return r, is: PT = P0eγT. The stock doesn’t pay any
You just took out a variable-rate mortgage on your new home. The mortgage value is $100,000, the term is 30 years, and initially the interest rate is 8%. The interest rate is fixed for 5 years, after which the time rate will be adjusted according to the prevailing rat
Quetion: A private equity fund invests $100 million into a portfolio company and receives 100% of the preferred stock and 80% of the common stock of the company. The preferred stock carries a face value of $1
I need the answers for the midterm exam for FIN6000
Calculated betas give different information if they are acquired by using weekly, monthly or daily data.
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