Explain reward versus risk
Explain reward versus risk.
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Figure: Reward versus risk, a selection of risky assets and the efficient frontier (bold green).
Harry Markowitz, together with Merton Miller and William Sharpe, was awarded the Nobel Prize for Economic Science in 1990.
Give explanation: The banks try to make short-term self-liquidating loans to businesses.
Explain drawbacks of Brownian motion.
Why is dispersion trading become unsuccessful?
Assume you are a euro-based investor who just sold Microsoft shares which you had bought six months ago. You had invested 10,000 euros to purchase Microsoft shares for $120 per share; the exchange rate was $1.15 per euro. You sold the stock for $135 per share
A risk-adjusted discount rate improves capital budgeting decision making compared to using a single discount rate for all projects. Explain.
List the arguments (variables) of which a FX call or put alternative model price is a function. How does the call & put premium change w.r.t. alteration in the arguments?Both call & put options are functions of just six variables: S
Illustrates Black–Scholes Equation with an example?
We focus more on cash flows rather than profits when estimating proposed capital budgeting projects. Explain.
When we can use Finite difference numerical method?
Explain Semi-strong form efficiency in Efficient Markets Hypothesis.
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