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An Increase in Consumption Spending and the Stock Market
An Increase in Consumption Spending and the Stock Market

... An upward sloping yield curve means that longterm interest rates are higher than short-term interest rates. Financial markets expect shortterm rates to be higher in the future. A downward sloping yield curve means that longterm interest rates are lower than short-term interest rates. Financial marke ...
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... make three dependent decisions. One of these decisions, however, has a special condition attached to it (the third number must be either 1 or 11). When using the Fundamental Counting Principle in a situation involving dependent decisions, if one decision has a special condition, that decision must b ...
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... If |CB| < b then T(CB) is a leaf node (a bucket) Else T(CB) defines a tree such that: The root is marked with an attribute Ai and a value v in Ai and The 2 k-d trees T({c  CB: c.i-attribute < v}) and T({c  CB: c.i-attribute  v}) are the left and right subtrees of the root ...
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the nigerian bond market
the nigerian bond market

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Data Structures and Algorithms IT2003
Data Structures and Algorithms IT2003

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Sample Level I Multiple Choice Questions

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Wayne Mayo - Productivity Commission

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Lattice model (finance)



For other meanings, see lattice model (disambiguation)In finance, a lattice model [1] is a technique applied to the valuation of derivatives, where, because of path dependence in the payoff, 1) a discretized model is required and 2) Monte Carlo methods fail to account for optimal decisions to terminate the derivative by early exercise. For equity options, a typical example would be pricing an American option, where a decision as to option exercise is required at ""all"" times (any time) before and including maturity. A continuous model, on the other hand, such as Black Scholes, would only allow for the valuation of European options, where exercise is on the option's maturity date. For interest rate derivatives lattices are additionally useful in that they address many of the issues encountered with continuous models, such as pull to par.
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