Herding is nothing but doing as other people are doing without any specific information But in information cascade there is a flow of information from ...well informed person to less informed .. Like rakesh jhunjhunwala koi stock buy krta h and isko dekh k bht se log b buy krte h chahe unka opinionRead more
Herding is nothing but doing as other people are doing without any specific information
But in information cascade there is a flow of information from …well informed person to less informed ..
Like rakesh jhunjhunwala koi stock buy krta h and isko dekh k bht se log b buy krte h chahe unka opinion alag ho us stock ko leke but they believe ki Rakesh jhunjhunwala k pas koi information h jo unke paas nh h ..so they follow him ..this is information cascade
Option C is correct bcoz issuing new equity doesn't affect debt holder adversely bcoz due to issue of equity debt to equity ratio improve whereas paying dividend can affect retained earnings and Equity sh. Will reduce and debt/eq. Ratio will rise And issuing new debt can also adversely affect existRead more
Option C is correct bcoz issuing new equity doesn’t affect debt holder adversely bcoz due to issue of equity debt to equity ratio improve whereas paying dividend can affect retained earnings and Equity sh. Will reduce and debt/eq. Ratio will rise
And issuing new debt can also adversely affect existing debt holder as new debt can be senior at the time of liquidation .
Safety first ratio is = {E(r)-Rmin}\SD And in simple words shortfall risk is how much chances there that our return can be lower than threshold Kitne percent chnace h ki port. Ret. Threshold ret. Se b niche aayega .(i.e 2% ) in our question and Safety first ratio is given 1.3 look for this value inRead more
Safety first ratio is = {E(r)-Rmin}\SD
And in simple words shortfall risk is how much chances there that our return can be lower than threshold
Kitne percent chnace h ki port. Ret. Threshold ret. Se b niche aayega .(i.e 2% ) in our question and Safety first ratio is given 1.3 look for this value in Z table (left side )
Fwd contract is calculated by spot(1+Rf)^time Bcoz if we buy underlying instead of fwd we have to pay Full amount so . price of a fwd cont should be spot price + riskfree rate of return
Fwd contract is calculated by spot(1+Rf)^time
Bcoz if we buy underlying instead of fwd we have to pay Full amount so . price of a fwd cont should be spot price + riskfree rate of return
actually you are partially right you are being mistaken between uniform and non uniform data in uniform continous data we have equal probablity of each possible outcome in non uniform we decide a probablity range ex. A good example of a continuous uniform distribution is an idealized random numbeRead more
actually you are partially right you are being mistaken between uniform and non uniform data
in uniform continous data we have equal probablity of each possible outcome
in non uniform we decide a probablity range
ex. A good example of a continuous uniform distribution is an idealized random number generator. With continuous uniform distribution, just like discrete uniform distribution, every variable has an equal chance of happening. However, there is an infinite number of points that can exist.
call -- right to buy put - right to sell if we will sell something in future and will get money ..why not now ..if we sell it right now ..we can earn int. income on the same similerly if we have right to buy ...then we should buy it in future to hold our fund . in hindi jo paisa jayega usko thda lRead more
call — right to buy
put – right to sell
if we will sell something in future and will get money ..why not now ..if we sell it right now ..we can earn int. income on the same
similerly if we have right to buy …then we should buy it in future to hold our fund .
in hindi
jo paisa jayega usko thda late jane do
but jo paisa aana h usko abhi aane do
so bcoz of TVM effect there is diff. in ATM european call and put price.
as per my understanding
hope it helps to recall…it was disscussed in class very thoroghly .
option C will be the ans spread is extra return over riskfree ret. for taking addition risk Re= Rf +spread because we know in economy contraction unemployment high ..and income low and adverse situation so there will be high chances of defaults ...so there will be spread widening due to risk premiuRead more
option C will be the ans
spread is extra return over riskfree ret. for taking addition risk
Re= Rf +spread
because we know in economy contraction unemployment high ..and income low
and adverse situation so there will be high chances of defaults …so there will be spread widening due to risk premium increment
probablity
why it will be greater then 50% ..?
why it will be greater then 50% ..?
See lessEquity
Herding is nothing but doing as other people are doing without any specific information But in information cascade there is a flow of information from ...well informed person to less informed .. Like rakesh jhunjhunwala koi stock buy krta h and isko dekh k bht se log b buy krte h chahe unka opinionRead more
Herding is nothing but doing as other people are doing without any specific information
But in information cascade there is a flow of information from …well informed person to less informed ..
Like rakesh jhunjhunwala koi stock buy krta h and isko dekh k bht se log b buy krte h chahe unka opinion alag ho us stock ko leke but they believe ki Rakesh jhunjhunwala k pas koi information h jo unke paas nh h ..so they follow him ..this is information cascade
See lessFixed Income
Option C is correct bcoz issuing new equity doesn't affect debt holder adversely bcoz due to issue of equity debt to equity ratio improve whereas paying dividend can affect retained earnings and Equity sh. Will reduce and debt/eq. Ratio will rise And issuing new debt can also adversely affect existRead more
Option C is correct bcoz issuing new equity doesn’t affect debt holder adversely bcoz due to issue of equity debt to equity ratio improve whereas paying dividend can affect retained earnings and Equity sh. Will reduce and debt/eq. Ratio will rise
And issuing new debt can also adversely affect existing debt holder as new debt can be senior at the time of liquidation .
See lessQuants
Safety first ratio is = {E(r)-Rmin}\SD And in simple words shortfall risk is how much chances there that our return can be lower than threshold Kitne percent chnace h ki port. Ret. Threshold ret. Se b niche aayega .(i.e 2% ) in our question and Safety first ratio is given 1.3 look for this value inRead more
Safety first ratio is = {E(r)-Rmin}\SD
And in simple words shortfall risk is how much chances there that our return can be lower than threshold
Kitne percent chnace h ki port. Ret. Threshold ret. Se b niche aayega .(i.e 2% ) in our question and Safety first ratio is given 1.3 look for this value in Z table (left side )
Then we will get .968
Explain
Fwd contract is calculated by spot(1+Rf)^time Bcoz if we buy underlying instead of fwd we have to pay Full amount so . price of a fwd cont should be spot price + riskfree rate of return
Fwd contract is calculated by spot(1+Rf)^time
See lessBcoz if we buy underlying instead of fwd we have to pay Full amount so . price of a fwd cont should be spot price + riskfree rate of return
Explain
there is direct relation between int. rate and fwd cont. value .
there is direct relation between int. rate and fwd cont. value .
See lessProbability Distribution
actually you are partially right you are being mistaken between uniform and non uniform data in uniform continous data we have equal probablity of each possible outcome in non uniform we decide a probablity range ex. A good example of a continuous uniform distribution is an idealized random numbeRead more
actually you are partially right you are being mistaken between uniform and non uniform data
in uniform continous data we have equal probablity of each possible outcome
in non uniform we decide a probablity range
ex. A good example of a continuous uniform distribution is an idealized random number generator. With continuous uniform distribution, just like discrete uniform distribution, every variable has an equal chance of happening. However, there is an infinite number of points that can exist.
See lessFixed Income
is this whole info. of question or some data given ..??
is this whole info. of question or some data given ..??
See lessOptions (Derivatives)
call -- right to buy put - right to sell if we will sell something in future and will get money ..why not now ..if we sell it right now ..we can earn int. income on the same similerly if we have right to buy ...then we should buy it in future to hold our fund . in hindi jo paisa jayega usko thda lRead more
call — right to buy
put – right to sell
if we will sell something in future and will get money ..why not now ..if we sell it right now ..we can earn int. income on the same
similerly if we have right to buy …then we should buy it in future to hold our fund .
in hindi
jo paisa jayega usko thda late jane do
but jo paisa aana h usko abhi aane do
so bcoz of TVM effect there is diff. in ATM european call and put price.
as per my understanding
hope it helps to recall…it was disscussed in class very thoroghly .
See lessFixed Income
option C will be the ans spread is extra return over riskfree ret. for taking addition risk Re= Rf +spread because we know in economy contraction unemployment high ..and income low and adverse situation so there will be high chances of defaults ...so there will be spread widening due to risk premiuRead more
option C will be the ans
spread is extra return over riskfree ret. for taking addition risk
Re= Rf +spread
because we know in economy contraction unemployment high ..and income low
and adverse situation so there will be high chances of defaults …so there will be spread widening due to risk premium increment
vice versa
in expansion …low default risk so narrow spread .
See less