What is Arbitrage Pricing Theory
What is Arbitrage Pricing Theory?
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In 1976, the Arbitrage Pricing Theory (APT) of Stephen Ross represents the returns on individual assets like a linear combination of many random factors. These random factors can be statistical factors or fundamental. When to be no arbitrage opportunities there should be restrictions on the investment processes.
Explain the term: annuity. How can continuous compounding benefit an investor?
How could MBAs cope?
Question 1 Four European vanilla Call options Ci ( ⋅) on an underlier with no interim cash flows, have identicalmaturity T . Their strike prices K i are such that K1 < K 2 < K 3 < K 4 and all strikes are equallyspaced. Interest rates are equ
How is the implied volatility calculated?
Explain the effect of a change in the discount rate on present value.
Why is actual volatility not easy to measure?
Explain Central Limit Theorem with an example of random variables.
What is actuarial approach in Central Limit Theorem?
What is Hedge?
How we get conservative estimate of the whole risk with a coherent measure of risk?
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