Please remember that Duration (D) is the average time in which the cashflows of a bond are received. Modified Duration(MD) = D/(1+R) If MD is 7 then it means that if YTM changes by 1% then Portfolio value will change by -1 *7 i.e. 7% Therefore if YTM increases by 1% and MD is 7, Portfolio value willRead more
Please remember that Duration (D) is the average time in which the cashflows of a bond are received.
Modified Duration(MD) = D/(1+R)
If MD is 7 then it means that if YTM changes by 1% then Portfolio value will change by -1 *7 i.e. 7%
Therefore if YTM increases by 1% and MD is 7, Portfolio value will change by -7% and if YTM decreases by 1% then it will increase portfolio value by +7%
The answer in my opinion- Theoretically it is correct that residual Income model reflects Cost of debt via Interest expense incorporated in the Net income. however, one of the shortcomings of the model is that it strictly relies upon the accounting data provided in the financial statements which mayRead more
The answer in my opinion-
Theoretically it is correct that residual Income model reflects Cost of debt via Interest expense incorporated in the Net income.
however, one of the shortcomings of the model is that it strictly relies upon the accounting data provided in the financial statements which may be managed or manipulated.
for eg– management of the company might have used a non GAAP measure where they capitalized a good chunk of interest expense.
Income statement will still hold an amount of interest expense but that would be manipulated i.e. not reflecting its true nature.
Volatility Smile- Its a 2 dimensional plot of Implied Volatility with respect to exercise price. The volatility skew is the difference in implied volatility (IV) between out-of-the-money options, at-the-money options, and in-the-money options.
Volatility Smile- Its a 2 dimensional plot of Implied Volatility with respect to exercise price.
The volatility skew is the difference in implied volatility (IV) between out-of-the-money options, at-the-money options, and in-the-money options.
Volatility Smile- Its a 2 dimensional plot of Implied Volatility with respect to exercise price. The volatility skew is the difference in implied volatility (IV) between out-of-the-money options, at-the-money options, and in-the-money options.
Volatility Smile- Its a 2 dimensional plot of Implied Volatility with respect to exercise price.
The volatility skew is the difference in implied volatility (IV) between out-of-the-money options, at-the-money options, and in-the-money options.
Volatility Smile- Its a 2 dimensional plot of Implied Volatility with respect to exercise price. The volatility skew is the difference in implied volatility (IV) between out-of-the-money options, at-the-money options, and in-the-money options.
Volatility Smile- Its a 2 dimensional plot of Implied Volatility with respect to exercise price.
The volatility skew is the difference in implied volatility (IV) between out-of-the-money options, at-the-money options, and in-the-money options.
You have to be aware of the concept of 'Confusion Matrix' for this question where ou need to identify True Positives (TP) and True Negatives (TN) in the Exhibit. TP- sentence #1,4,6 (i.e. 3) TN- sentence#2,5,7,10 (i.e. 4) Hence accuracy metric= (4+3)/10= 0.7
You have to be aware of the concept of ‘Confusion Matrix’ for this question where ou need to identify True Positives (TP) and True Negatives (TN) in the Exhibit.
The Answer- The confidence level influences the width of the forecast interval through the critical t-value that is used to calculate the distance from the forecasted value: The larger the confidence level, the wider the interval. Therefore, Observation 1 is not correct. Observation 2 is correct. ThRead more
The Answer-
The confidence level influences the width of the forecast interval
through the critical t-value that is used to calculate the distance from the forecasted value: The larger the confidence level, the wider the interval. Therefore,
Observation 1 is not correct.
Observation 2 is correct. The greater the standard error of the estimate, the
greater the standard error of the forecast
Relation between YTM and DURATION
Please remember that Duration (D) is the average time in which the cashflows of a bond are received. Modified Duration(MD) = D/(1+R) If MD is 7 then it means that if YTM changes by 1% then Portfolio value will change by -1 *7 i.e. 7% Therefore if YTM increases by 1% and MD is 7, Portfolio value willRead more
Please remember that Duration (D) is the average time in which the cashflows of a bond are received.
Modified Duration(MD) = D/(1+R)
If MD is 7 then it means that if YTM changes by 1% then Portfolio value will change by -1 *7 i.e. 7%
Therefore if YTM increases by 1% and MD is 7, Portfolio value will change by -7% and if YTM decreases by 1% then it will increase portfolio value by +7%
See lessResidual Income
The answer in my opinion- Theoretically it is correct that residual Income model reflects Cost of debt via Interest expense incorporated in the Net income. however, one of the shortcomings of the model is that it strictly relies upon the accounting data provided in the financial statements which mayRead more
The answer in my opinion-
Theoretically it is correct that residual Income model reflects Cost of debt via Interest expense incorporated in the Net income.
however, one of the shortcomings of the model is that it strictly relies upon the accounting data provided in the financial statements which may be managed or manipulated.
for eg– management of the company might have used a non GAAP measure where they capitalized a good chunk of interest expense.
Income statement will still hold an amount of interest expense but that would be manipulated i.e. not reflecting its true nature.
Option Greek
Volatility Smile- Its a 2 dimensional plot of Implied Volatility with respect to exercise price. The volatility skew is the difference in implied volatility (IV) between out-of-the-money options, at-the-money options, and in-the-money options.
Volatility Smile- Its a 2 dimensional plot of Implied Volatility with respect to exercise price.
The volatility skew is the difference in implied volatility (IV) between out-of-the-money options, at-the-money options, and in-the-money options.
See lessOption Greek
Volatility Smile- Its a 2 dimensional plot of Implied Volatility with respect to exercise price. The volatility skew is the difference in implied volatility (IV) between out-of-the-money options, at-the-money options, and in-the-money options.
Volatility Smile- Its a 2 dimensional plot of Implied Volatility with respect to exercise price.
The volatility skew is the difference in implied volatility (IV) between out-of-the-money options, at-the-money options, and in-the-money options.
See lessOption Greek
Volatility Smile- Its a 2 dimensional plot of Implied Volatility with respect to exercise price. The volatility skew is the difference in implied volatility (IV) between out-of-the-money options, at-the-money options, and in-the-money options.
Volatility Smile- Its a 2 dimensional plot of Implied Volatility with respect to exercise price.
The volatility skew is the difference in implied volatility (IV) between out-of-the-money options, at-the-money options, and in-the-money options.
See lessMultinational Ops
Big Data
You have to be aware of the concept of 'Confusion Matrix' for this question where ou need to identify True Positives (TP) and True Negatives (TN) in the Exhibit. TP- sentence #1,4,6 (i.e. 3) TN- sentence#2,5,7,10 (i.e. 4) Hence accuracy metric= (4+3)/10= 0.7
You have to be aware of the concept of ‘Confusion Matrix’ for this question where ou need to identify True Positives (TP) and True Negatives (TN) in the Exhibit.
TP- sentence #1,4,6 (i.e. 3)
TN- sentence#2,5,7,10 (i.e. 4)
Hence accuracy metric= (4+3)/10= 0.7
See lessSimple Regression
Can you please explain the statements in simple language or Hindi if possi?
Can you please explain the statements in simple language or Hindi if possi?
See lessSimple Regression
The Answer- The confidence level influences the width of the forecast interval through the critical t-value that is used to calculate the distance from the forecasted value: The larger the confidence level, the wider the interval. Therefore, Observation 1 is not correct. Observation 2 is correct. ThRead more
The Answer-
The confidence level influences the width of the forecast interval
See lessthrough the critical t-value that is used to calculate the distance from the forecasted value: The larger the confidence level, the wider the interval. Therefore,
Observation 1 is not correct.
Observation 2 is correct. The greater the standard error of the estimate, the
greater the standard error of the forecast
Credit Spread Term Structure
Sharing the link of same would be kindly appreciated as I'm unable to find it.
Sharing the link of same would be kindly appreciated as I’m unable to find it.
See less