The Details of our Investment Process
... Investments in stocks will generate more wealth over time (historically 9-12% per year) than investments in either bonds or money market funds. The key to earning above-average returns is discipline and consistency. There are many systems that work, but most break down because investors, for a varie ...
... Investments in stocks will generate more wealth over time (historically 9-12% per year) than investments in either bonds or money market funds. The key to earning above-average returns is discipline and consistency. There are many systems that work, but most break down because investors, for a varie ...
Interest Rate Models
... These notes have been written for a graduate course on fixed income models that I held in the fall term 2002–2003 at the Department of Operations Research and Financial Engineering at Princeton University. The number of books on fixed income models is growing, yet it is difficult to find a convenien ...
... These notes have been written for a graduate course on fixed income models that I held in the fall term 2002–2003 at the Department of Operations Research and Financial Engineering at Princeton University. The number of books on fixed income models is growing, yet it is difficult to find a convenien ...
Data Structures and Algorithms
... In DFT, each visited node is placed in the stack 28. Define Breadth First Traversal. Visits all successors of a visited node before visiting any successors of any of those successors. In BFT, each visited node is placed on the queue. 29. What are called Dynamic data structures? Structures which grow ...
... In DFT, each visited node is placed in the stack 28. Define Breadth First Traversal. Visits all successors of a visited node before visiting any successors of any of those successors. In BFT, each visited node is placed on the queue. 29. What are called Dynamic data structures? Structures which grow ...
Simple Interest:
... Simple Interest: Principal (P) is the sum of money you borrow from or lend to a person. The Interest rate (r) is the fee you earn from lending money or a fee you pay for borrowing money. The interest rate, unless otherwise stated, is an annual rate. Simple Interest I Prt where P = Principal r = An ...
... Simple Interest: Principal (P) is the sum of money you borrow from or lend to a person. The Interest rate (r) is the fee you earn from lending money or a fee you pay for borrowing money. The interest rate, unless otherwise stated, is an annual rate. Simple Interest I Prt where P = Principal r = An ...
Data Structure
... 16. What is the type of the algorithm used in solving the 8 Queens problem? Backtracking 17. In an AVL tree, at what condition the balancing is to be done? If the ‘pivotal value’ (or the ‘Height factor’) is greater than 1 or less than –1. 18. What is the bucket size, when the overlapping and collisi ...
... 16. What is the type of the algorithm used in solving the 8 Queens problem? Backtracking 17. In an AVL tree, at what condition the balancing is to be done? If the ‘pivotal value’ (or the ‘Height factor’) is greater than 1 or less than –1. 18. What is the bucket size, when the overlapping and collisi ...
Tries Data Structure
... Tries are appropriate when many words begin with the same sequence of letters. i.e; when the number of distinct prefixes among all words in the set is much less than the total length of all the words. Each path from the root to the leaf corresponds to one word in the represented set. Nodes of the tr ...
... Tries are appropriate when many words begin with the same sequence of letters. i.e; when the number of distinct prefixes among all words in the set is much less than the total length of all the words. Each path from the root to the leaf corresponds to one word in the represented set. Nodes of the tr ...
Discussion of “Credit Supply and the Housing Boom” by Alejandro Justiniano,
... The paper is on the right track in emphasizing the supply of finance to housing Rough calculations suggest that all of the price increase resulted from declining interest rates; innovation in mortgage forms and extension of eligibility to less credit-worthy borrowers is secondary So the paper’s char ...
... The paper is on the right track in emphasizing the supply of finance to housing Rough calculations suggest that all of the price increase resulted from declining interest rates; innovation in mortgage forms and extension of eligibility to less credit-worthy borrowers is secondary So the paper’s char ...
Juan Ibarra 2/6/07 Professor Anu Vuorikoski Bus 173A
... expected to grow at a constant rate. They are valued using the following formula: ^P0 = D0 / (1 + g) / rs – g = D1 / rs – g 3. If g>r, the constant growth model cannot be used. If g>r, you will get a negative stock price and it’s not true because you cannot have a negative stock price. We can only u ...
... expected to grow at a constant rate. They are valued using the following formula: ^P0 = D0 / (1 + g) / rs – g = D1 / rs – g 3. If g>r, the constant growth model cannot be used. If g>r, you will get a negative stock price and it’s not true because you cannot have a negative stock price. We can only u ...
Priority Queues and Hashing
... this leaves a hole that needs to be refilled. To do that, find a leaf to be dropped, put its key value into the root node, and delete the leaf. The new value in the root may violate the heap property. Use the technique from the algorithm “heapify” to correct such violations. Describe your implementa ...
... this leaves a hole that needs to be refilled. To do that, find a leaf to be dropped, put its key value into the root node, and delete the leaf. The new value in the root may violate the heap property. Use the technique from the algorithm “heapify” to correct such violations. Describe your implementa ...
Chapter 5
... The currency exposure cannot exactly match exchange’s contract size. Clients can only partly hedge their exposure. There is a mismatch between maturity of the contract and maturity of the cash flow. Frequent margin calls bring inconvenient for businesses. ...
... The currency exposure cannot exactly match exchange’s contract size. Clients can only partly hedge their exposure. There is a mismatch between maturity of the contract and maturity of the cash flow. Frequent margin calls bring inconvenient for businesses. ...
Euro Currency Risk in Global Equities
... The third reason to be concerned about euro exposure is that the nominal and real value of the US Dollar is at a historic low on a trade-weighted basis. Currency cycles tend to last from 5 to 15 years, and over the past decade the dollar’s weakening has contributed positive returns to unhedged inter ...
... The third reason to be concerned about euro exposure is that the nominal and real value of the US Dollar is at a historic low on a trade-weighted basis. Currency cycles tend to last from 5 to 15 years, and over the past decade the dollar’s weakening has contributed positive returns to unhedged inter ...
Value of firm`s shares
... discount the free cash flows. WACC: after-tax weighted average required return on all types of securities that firm issues. We have an estimate of total value of the firm. How can we use this to value the firm’s shares? ...
... discount the free cash flows. WACC: after-tax weighted average required return on all types of securities that firm issues. We have an estimate of total value of the firm. How can we use this to value the firm’s shares? ...
butterfly spread
... movements; roughly, more volatility means that larger price swings may occur. Options react to volatility! Option values depend on how much uncertainty one expects in the price of the underlying over the life of the option. Both long call and long put benefit from volatility. ...
... movements; roughly, more volatility means that larger price swings may occur. Options react to volatility! Option values depend on how much uncertainty one expects in the price of the underlying over the life of the option. Both long call and long put benefit from volatility. ...
effective interest rate
... Conventional wisdom used to assert that a LIBID rate could be calculated by subtracting a fixed amount (often given as ⅛th of 1%) from the prevailing BBA LIBOR rate, however this is no longer the case as bid/offer spreads have tightened in recent years. Additionally, it cannot be the case that the ...
... Conventional wisdom used to assert that a LIBID rate could be calculated by subtracting a fixed amount (often given as ⅛th of 1%) from the prevailing BBA LIBOR rate, however this is no longer the case as bid/offer spreads have tightened in recent years. Additionally, it cannot be the case that the ...
Exam
... This exercise is concerned with stacks and queues. (a) Assume we have two stacks at our disposal, with the operations push and pop as specified in the abstract data type for stacks. Use them to implement the operations enqueue and dequeue of the abstract data type for queues. Do it in such a way tha ...
... This exercise is concerned with stacks and queues. (a) Assume we have two stacks at our disposal, with the operations push and pop as specified in the abstract data type for stacks. Use them to implement the operations enqueue and dequeue of the abstract data type for queues. Do it in such a way tha ...
QuizWeek06a
... See Page 107. An option’s theta measures the change in the option premium with respect to passage of time. Generally it is negative. Option writers prefer high thetas because the value of the option falls rapidly as it approaches expiration. ...
... See Page 107. An option’s theta measures the change in the option premium with respect to passage of time. Generally it is negative. Option writers prefer high thetas because the value of the option falls rapidly as it approaches expiration. ...
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.