State the term dispersion trading
State the term dispersion trading?
Expert
Dispersion trading is a strategy including the selling of options on an index against buying a basket of options upon individual stocks. This strategy is a play upon the behaviour of correlations throughout normal markets and throughout large market moves. When the individual assets returns are extensively dispersed then there may be little movement into the index, however a large movement in the individual assets. It would result in a large payoff on the individual asset options other than little to payback upon the short index option.
A corporation enters in a five-year interest rate swap along with a swap bank wherein it agrees to pay the swap bank a fixed-rate of 9.75 percent annually on a notional amount of DM15,000,000 and attain LIBOR - ½ percent. As of the second reset date,
Explain another way of interpreting put–call parity.
Explain possible future paths for an asset, proposed by Boyle Phelim.
Normal 0 false false
What are the benefits of “paying late” and how do companies try to do this?
What are some of the primary advantages and the risks when a corporation has operations in countries other than its home country?
Describe the concept of the world beta of a security.The world beta measures the sensitivity of returns to security to returns to the world market portfolio. This is a measure of the systematic risk of the security in global setting. Statistically, the world beta can be des
Explain marking to market with an example.
Explain the term FIGARCH as of the GARCH’s family.
18,76,764
1960140 Asked
3,689
Active Tutors
1419487
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!