Explain what is a Monte Carlo method
Explain what is a Monte Carlo method?
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This method simulates the random behaviour underlying the financial models. Therefore, in a sense they find right to the heart of the problem. Always keep in mind that, while pricing you should simulate the risk-neutral random walks, the value of a contract is then the ordinary present value of all cash flows.
Explain the commonsense criteria that of a measure of risk.
Explain the important properties of Brownian motion.
How is Gamma hedging more precise form of hedging that theoretically eliminates?
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Explain in detail stock dividends and stock splits affect the common stock’s market price. Also explain why a firm declares stock dividends and stock splits?
the criteria for a good international financial or monetary system
What is implied volatility? Answer: Implied volatility is number into the Black–Scholes formula which makes a theoretical price equal a market price.
What about exotic or over-the-counter (OTC) contracts?
1)What 3 items of important information does the income statement reveal about the financial performance of the company over the last three years?
What is the validity of the Efficient-market hypothesis?
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