When we can use Monte Carlo numerical method
When we can use Monte Carlo numerical method?
Expert
Monte Carlo is great for complicated path dependency and high dimensionality and for problems that cannot simply be written in differential equation form.
Great Corporation has the following capital situation. Debt: One thousand bonds were issued five years ago at a coupon rate of 11%. They had 20-year terms and $1,000 face values. They are now selling to yield 9%. The tax rate is 37% Preferred stock: Two thousand shares of preferred are outstanding,
Define the term Hedging using implied volatility?
Explain the correlation between financial quantities.
Explain in brief capital rationing? What are reasons that a firm should practice capital rationing?
What is MCC (marginal cost of capital schedule)? The schedule is always a horizontal line. Elaborate.
Give explanation: The banks try to make short-term self-liquidating loans to businesses.
What is excess return?
Explain Capital Asset Pricing Model returns on individual assets and Arbitrage Pricing Theory returns on investments.
What is trustworthy collateral from the lender's perspective? Explain whether accounts receivable and inventory are trustworthy collateral.
Give an example of different types of mathematics found in Quantitative Finance?
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