--%>
Assignment Help - homework help

What is rehedging the portfolio

What is rehedging the portfolio?

E

Expert

Verified

Normally the delta changes as stock price and time change, therefore to keep a delta-neutral position the number of assets held needs continual readjustment by sale or purchase of the stock. It is termed as rebalancing or rehedging the portfolio.

   Related Questions in Financial Management

  • Q : Explain that Gamma hedging more precise

    How is Gamma hedging more precise form of hedging that theoretically eliminates?

    		•
  • Q : Implicit SF-$ exchange rate at maturity

    Consider 8.5 % Swiss franc/U.S. dollar dual currency bonds which pay $666.67 at maturity per SF1,000 of par value.  Describe implicit SF/$ exchange rate at maturity?  Will the investor be better or worse off at maturity if the real SF/$ exchange rate

    		•
  • Q : How is Poisson process defined How is

    How is Poisson process defined?

    		•
  • Q : Factors that responsible for the recent

    Explain the factors that responsible for the recent surge in international portfolio investment (IPI)?The recent surge in international portfolio investments reflects globalization of financial markets. In particular, several countries have dere

    		•
  • Q : Deposit-loan rate How does the

    How does the deposit-loan rate spread out into the Eurodollar market compare to the deposit-loan rate spread out in the domestic U.S. banking system?  Why?The deposit-loan spread out in the Eurodollar market is narrower than in the domestic

    		•
  • Q : What is Kelly Fraction What is Kelly

    What is Kelly Fraction?  Explain.

    		•
  • Q : Define back-to-back loan Define

    Define back-to-back loan. A back-to-back loan involves two parties only. One MNC borrows and re-lends directly to another.

    		•
  • Q : Mini case B. Show how Kareem's WACC

    B. 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.

    		•
  • Q : Explain marking to market will put

    Explain marking to market will put some rationality back in trading.

    		•
  • Q : How are short or future option margins

    How are short or future option margins to be paid at credit risk?

    		•