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.
What is Crash Metrics?
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What is the Capital Asset Pricing Model?
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The March 2000 Mexican peso futures contract holds a price of $0.11695. You believe the march spot price will be $0.08500. In which speculative location would you enter to try to earn profit from your beliefs? Illustrates your anticipated profits letting yo
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factor responsible for surging the international investment portfolio
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Explain degree of confidence and the relationship along with deviation.
You have one hat containing normally distributed random numbers, with a mean of zero and a standard deviation of σ which is unknown. You draw N numbers φi from this hat. What is the ‘probability’ of drawing all of the numbers &ph
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