Illustrates that how is all money far riskier in a stock
Should you place all your money in a stock which has low risk but also low expected return, or one along with high expected return but that is far riskier or maybe divide your money among the two?
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Modern Portfolio Theory addresses that question and gives a framework for understanding and quantifying return and risk.
Explain Certainty equivalent as a function of the risk-aversion parameter.
Assume that the treasurer of IBM contains an extra cash reserve of $1,000,000 to invest for six months. The six-month interest rate is 8% per annum in the U.S. and 6% per annum in Germany. Now, the spot exchange rate is DM1.60 per dollar and the six-month forw
How is quantity of model risk dependency on vega hedge?
Give explanation: The banks try to make short-term self-liquidating loans to businesses.
When was quantitative finance the domain of either economists or applied mathematicians?
How is Utility Function Used?
What is an LBO (leveraged buyout)? Explain the risks and the potential rewards for the equity investors.
Rs. Sales 2,40,000 Variable costs 1,44,000 Fixed costs 26,000 Profit before tax 70,000 Rate of tax 40% Firm is proposing to buy the new plant that could generate extra annual profit of Rs. 10,000. The fixed cost of new plant is expected to Rs. 4000. New plant would increase sales volume by Rs. 40,00
Explain some examples of mutually exclusive projects.
State the term Option Adjusted Spread? Answer: The OAS stands for Option Adjusted Spread is the constant spread added to a forward or a yield curve to match the mark
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