Quantitative finance in disrepute for financial collapse
Explain the field of quantitative finance in disrepute for biggest financial collapse in all decades.
Expert
In early August 2007, some hedge funds using quantitative strategies experienced losses upon certain a scale as to bring the field of quantitative finance in disrepute. From after that, and through 2008, trading of complex derivative products into obscene amounts using simplistic mathematical models approximately brought the global financial market to its knees: Lend to the less-than-completely-creditworthy for home purchase, repackage these mortgages for selling on by one bank to another, at every stage adding complexity, combine along with overoptimistic ratings specified to these products by the ratings agencies, along with a dash of moral hazard thrown in, base this all on a crunchy base of a morally corrupt compensation scheme and you contain the recipe for the biggest financial collapse in all decades.
Out of this many people became extremely rich, while in many cases the man in street lost his life savings. Financial modelling is what made it seem all so safe and simple.
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
Explain possible future paths for an asset, proposed by Boyle Phelim.
Explain in brief the way to incorporate management goals into pro forma financial statements.
The discussion of zero-coupon bonds in the text gave an instance of two zero-coupon bonds issued through Commerzbank. The DM300, 000,000 issues due in the year of 1995 sold at 50 percent of face value and the DM300, 000,000 due in the year of 2000 sold a
How is quantity of model risk dependency on vega hedge?
What are those factors that common stockholders would consider while deciding how much cash dividends they want from corporation in which they have invested?
What is transition probability density function? Explain the term with forward and Backward Equations.
Why is Vomma/Volga measures convexity?
Explain the term complete market.
What is Co-integration?
18,76,764
1928117 Asked
3,689
Active Tutors
1418553
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!