Resolving a ranking conflict
Explain how and why to resolve a “ranking conflict” between the internal rate of return and the net present value.
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Every time when a ranking conflict is there between internal rate of return and the net present value, we normally propose that project with the maximum net present value should be chosen. It is mainly for the reason that net present value method relates directly with primary financial goal of the firm to increase the firm value.
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.
What is Extreme Value Theory?
Explain how is exposed model risk of Delta hedging is reduced by static hedging.
Remark on the following statement: "As the U.S. imports more than it exports, it is essential for the U.S. to import capital from foreign countries to finance its present account deficits."The statement presupposes that the U.S. present account
What kind of insurance organisations usually takes on the greater risks: a life insurance company or casualty insurance company and a property?
Explain the term Serial Autocorrelation.
Does High operating leverage mean high business risk. Elaborate the statement.
What is Platinum Hedging?
Why is Value at Risk important? Specified with reasons?
How is Value of a Contract solved?
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