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.
Describe how exchange rate fluctuations influence the return from a foreign market measured in dollar terms. Describe the empirical evidence on the effect of exchange rate uncertainty on the risk of foreign investment.Mostly exchange rate fluctu
Illustrates an example of Arbitrage?
What is Information Ratio?
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
Explain the term CGARCH as of the GARCH’s family.
On the contrary to the U.S., Japan has felt continuous current account surpluses. What could be the foremost causes for these surpluses? Is it desirable to have continuous current account surpluses? Japan's continu
Which is lesser for a particular company: the cost of equity or the cost of debt (ignoring taxes)? Explain.
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What are statistical or macroeconomic factors?
Explain how is exposed model risk of Delta hedging is reduced by static hedging.
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