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working paper / xx/12 - Ministry of Social Development
working paper / xx/12 - Ministry of Social Development

... policy problems inasmuch as the rules governing the institutions concerned are made or influenced by the government, and the consequences of institutional failure if it occurs are likely to be public policy problems themselves. Although the desired outcome – efficient decumulation – is known, the pr ...
Hedging strategies in energy markets: The case of electricity retailers
Hedging strategies in energy markets: The case of electricity retailers

... confidence interval (generally 95%). Thus, VaR is measured in monetary units, Euros in our article. As the maximum loss of a portfolio, the VaR(95%) is a negative number. Therefore, maximizing the VaR is equivalent to minimizing the portfolio's loss. We rely on the Value at Risk because it is a good ...
PDF Download
PDF Download

... which will cause mean-preserving spreads to reduce demand for a risky asset. Rather, we focus on changes in risk that will induce all risk averters to demand less of the asset. Although one cannot assume, in general, that asset demand is downward sloping, it turns out always to be downward sloping a ...
Implementation of an Augmented Directed Graph Data Structure for
Implementation of an Augmented Directed Graph Data Structure for

... reduced by each of the sums in the list. The list is not modified, but it is passed to downstream edges. Convergences are handled the same way in all cases. The sum pushed to a convergent node may be reduced in up to two ways. First, it may be reduced by the sum pushed to the associated one-in-one- ...
Kεφάλαιο 8
Kεφάλαιο 8

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A multi-phase algorithm for a joint lot

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A Representation: Fast Algorithm Optimal Kernel Design for

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View PDF - CiteSeerX

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GMO: Six Impossible Things Before Breakfast

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... is the difference between the return corresponding to the beta implied by the total risk of the portfolio and the return corresponding to its actual beta • Diversifiable risk decreases as portfolio size increases, so if the portfolio is well diversified the “diversification return” should be near ze ...
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Rank-Approximate Nearest Neighbor Search: Retaining

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Efficient Data Structures for Storing Partitions of Integers

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Longevity risk - Andrei Simonov

... of bond set at 20 basis points.  Given that this is first ever bond brought to market, markets have no real feeling as to how fair this figure is.  However, concern that up-front capital was too large compared with risks being hedged by bond: – longevity and interest rate risks ...
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Premium Factors and the Risk-Return Trade

Training - NYU Stern
Training - NYU Stern

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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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