Problems with real probabilities to price derivatives
What are the main problems with real probabilities to price derivatives?
Expert
Two main problems are there with it.1. You need to be capable to measure real probabilities. 2. You need to decide on a measure of risk aversion or a utility function.
Give an example of worst-case scenarios and uncertainty?
Suppose you are the swap bank in the Eli Lilly swap. Create an example of how you might lay off the swap to an opposing counterparty.The swap bank may attempt to lay off the swap on Japanese MNC which has issued yen denominated debt to finance
Describe balance of payments identity and explain its implication under the fixed & flexible exchange rate regimes.The balance of payments identity holds that the combined balance on the current & capital accounts have to be equivalent i
Describe how the advent of the euro would influence international diversification strategies. As the euro-zone will have the similar monetary and exchange-rate policies, the correlations between euro-zone markets a
venture capital valuation method a venture capitalist wants to estimate the value of a new venture. the venture is not expected to produce net income or earnings until the end of year 5 when the net income is estimated at 1,600,000.00. A publicly traded competitor or comparable firm has current ea
Normal 0 false false
What is Colour for option value?
Explain how changes occur in Crash Metrics during a crash?
What is the Black–Scholes Equation?
Explain actual volatility with desmond fitzgerald calls.
18,76,764
1936275 Asked
3,689
Active Tutors
1423114
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!