In financial theory how financial data satisfied
In financial theory how financial data satisfied?
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Obviously, financial data may not satisfy all of these, or certainly, any. In exacting, it turns out that when you try to fit equity returns data with non-normal distributions you frequently get that the best distribution is one that has infinite variance. Not only does this complicate the good mathematics of normal distributions and the Central Limit Theorem, this also results in infinite volatility. It is appealing to those who want to give the best models of financial reality but does rather spoil several decades of financial theory and practice based upon volatility as a measure of risk, for illustration.
Explain the important properties of Brownian motion.
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Boeing Company is expecting to have EBIT next year of $10 million, with a standard deviation of $5 million. Boeing has $40 million in bonds with coupon of 8%, selling at par, which are being retired at the rate of $3 million annually. Boeing also has 200,000 shares of preferred stock, which pays ann
Explain when the dividends should be similar to discounted.
In order for a derivatives market to function two kind of economic agents are required: hedgers & speculators. Describe.Two kinds of market participants are essential for the operation of a derivatives market: speculators & hedgers.
Security returns are found to be less correlated across countries than in a country. Why can it be?Security returns are less correlated possibly because countries are distinct from each other in terms of industry structure, macroeconomic policie
Explain degree of confidence and the relationship along with deviation.
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