In financial theory how financial data satisfied
In financial theory how financial data satisfied?
Expert
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.
Provide three examples of mutually exclusive projects.
When we can use Monte Carlo numerical method?
Describe triangular arbitrage? What is a condition which will give increase to a triangular arbitrage opportunity?Triangular arbitrage is the procedure of trading out of the U.S. dollar in a second currency, then trading it for a third currency
Describe difference between the retail or client market and the wholesale or interbank market for foreign exchange?The market for foreign exchange can be distinguished as two-tier market. One tier is the wholesale or interbank market and the ot
Describe the name of volatilities.
Does LMM stand for? Explain.
What is Vega?
Elaborate the statement: Coefficient of variation is a better risk calculator to use than the standard deviation when estimating the risk of capital budgeting projects.
How does Jump-Diffusion Model Affect Option Values?
Explain valid criticisms of Value at Risk.
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