The correlation coefficient for two variable
What happens if the correlation coefficient for two variables is -1 or 0 or +1?
Expert
Correlation is calculated using the correlation coefficient and represented by the letter r. Correlation coefficient can have values between perfect negative correlation (-1.0) to perfect positive correlation (+1.0). a) The closer r is to +1.0, the more will be chances that the two variables will try to move with each other at the same time. b) The closer r is to -1.0, the more will be the chances that two variables will try to move opposite each other at the same time. c) An r having zero value shows that the variable’s values are not related to each other at all. It is called as statistical independence.
What is the Finite-Difference Method?
Explain the term implied volatility in Black–Scholes option-pricing equation.
Show how Kareem's WACC would change if the tax rate dropped to 25 percent and the estimated cost of equity capital were based on a risk-free rate of 7 percent, a market risk premium of 8 percent, and a systematic risk measure or beta of 2.0.
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.
Explain no arbitrage in classical finance theory and derivatives theory.
Explain the econometric models.
Explain the requirement interest-rate model.
Describe Euro-medium-term-note market Normal 0
Leveraged Buy-Out (LBO): It is a specific kind of acquisition in which the takeover of the controlling interest in a company is prepared by employing a noteworthy amount of borrowed capital from the banks and or capital markets. Inter
Explain the reasons why all apparent arbitrage opportunities cannot be exploited.
18,76,764
1937107 Asked
3,689
Active Tutors
1428002
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!