Who explain short-term interest rate by a stochasti
Who illustrated short-term interest rate through a stochastic differential equation?
Expert
Oldrich Vasicek illustrated the short-term interest rate through a stochastic differential equation of the form:
dr = µ(r, t) dt + σ(r, t) dX.
The bond pricing equation is a parabolic partial differential equation, same to the Black–Scholes equation.
Assume that the treasurer of IBM contains an extra cash reserve of $1,000,000 to invest for six months. The six-month interest rate is 8% per annum in the U.S. and 6% per annum in Germany. Now, the spot exchange rate is DM1.60 per dollar and the six-month forw
Suppose spot Swiss franc is $0.7000 and the six-month forward rate is $0.6950. Estimate the minimum price which a six-month American call option along with a striking price of $0.6800 must sell for in a rational market? Suppose the annualized six-month Eurod
Illustrates an example an arbitrage opportunity?
What is Black–Scholes equation? Explain.
Why is volatility annualized standard deviation of return?
Illustrates an example of probabilities in a simple coin-tossing experiment.
Review a current article on strategic planning from a business journal. The article should have been published within the last 3 years. The review is to include full bibliographical information for the article being reviewed and any other referenced material; discuss in scholarly detail a summary of
What can a financial institution frequently do for a DEU (deficit economic unit) that it would have trouble doing for itself if the DEU were to deal directly with SEU?
How are you able to measure real probabilities?
How is Information Ratio calculated?
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