Explain normal distribution model proposed by L.Bachelier
Explain normal distribution model proposed by Louis Bachelier.
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He proposed a model as a simple normal distribution, for equity prices and built on this a model for pricing the almost unheard of alternatives. His model consists of many of the seeds for later work, although lay ‘dormant’ for many, many years.
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B. Show how Kareem's WACC would change if the tax rate dropped to 25 percent and the estimated cost of equity capital were based on a risk-free rate of 7 percent, a market risk premium of 8 percent, and a systematic risk measure or beta of 2.0.
A CD/$ bank trader is at present quoting a small figure bid-ask of 35-40, while the rest of the market is trading at CD1.3436-CD1.3441. What is implied regarding the trader's beliefs by his prices?The trader have to think the Canadian dollar wi
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