4. Explain return generating models (including the market model) and their uses Return generating models are used to estimate the expected returns on risky securities based on specific factors. A simplified ⇒ The market model: Ri = ?i + ?i . Rm + ei Where: i: Return on asset i, Rm : market return. ?i: […]
The feeling of worthless, that you can not make it will destroy your day. I had been there once before. After I got the result and got the “ We are so sorry ….” email, looked at half of my friends who were celebrating for the result, and other half remained silence …. But I […]
Multiple Liabilities The key to immunizing multiple liabilities is to decompose the portfolio payment streams in such a way that the component streams separately immunize each of the multiple liabilities. Multiple liability immunization is possible if the following three conditions are satisfied (assuming parallel rate shifts): – Assets and liabilities have the same present values […]