Who explain short-term interest rate by a stochasti
Who illustrated short-term interest rate through a stochastic differential equation?
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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.
Differentiate between compound interest and discounting.
Company A is a AAA-rated firm wanting to issue five-year FRNs. It determines that it can issue FRNs at six-month LIBOR + 1/8 percent or at the six-month Treasury-bill rate + ½ percent. Specified its asset structure, LIBOR is the preferred index. Comp
State the term bootstrapping using discount factors.
What are the interest areas for financial managers when they go through pro forma financial statements?
What is the meaning of “U.S. dollar weakens in the foreign exchange market”?
Describe how the advent of the euro would influence international diversification strategies. As the euro-zone will have the similar monetary and exchange-rate policies, the correlations between euro-zone markets a
Explain the validity in various forms of Efficient-market hypothesis.
Explain Adaptive Market Hypothesis of Andrew Lo.
Why cash flows and accounting profits are not considered the same thing.
What are a bank's primary reserves? When the Fed sets reserve requirements, what is its primary goal?
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