What are Implications of the normal distribution for Finance
What are Implications of the normal distribution for Finance?
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Similar argument could be applied to the daily changes during exchange rate rates, risk of default or interest rates. We get ourselves using the normal distribution rather naturally for various financial processes.As frequently with mathematical ‘laws’ there is the ‘legal’ small print, while the conditions under that the Central Limit Theorem applies.
Explain when standard deviation is not relevant?
Explain Capital Asset Pricing Model returns on individual assets and Arbitrage Pricing Theory returns on investments.
What will an investment banker do while underwriting a new security issue for a corporation?
List the arguments (variables) of which a FX call or put alternative model price is a function. How does the call & put premium change w.r.t. alteration in the arguments?Both call & put options are functions of just six variables: S
What is Sharpe ratio?
Would there be positive interest rates on bonds in a world with absolutely no risk (no default risk, maturity risk, and so on)? Why would a lender demand and a borrower be willing to pay, a positive interest rate in such a no risk world?
Explain degree of confidence and the relationship along with deviation.
What is Meant by ‘Complete’ and ‘Incomplete’ Markets?
Explain the formula of hedging contract.
A. What per visit price must be set for the service to break even? To earn an annual profit of $100,000
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