Hi @David Harper CFA FRM
What would be the answer to below question?
1."Which greek has same effect on both put/call" - is this gamma?
2 "Which distribution to choose to capture movements beyond a threshold?"
Cool - I think i got it now, mostly at least. Not sure about the part "Interest earned on the cash received outweighs holding the asset..." - i.e. what cash was received by the short?or are we saying the cash "to be received" upon delivery? [my insight here, if I am correct is that the timing...
I was just watching the video on futures and couldn't get the logic behind "If futures prices are increasing functions with time to maturity, short should deliver as soon as possible." specifically, what do you mean by "this is because the interest earned on the cash received...
Can you please explain why a forward contract on a stock has a delta of 1 whereas an option on a stock will have a delta of less than 1? Is it because options have a strike price while forwards don't?
Thanks for the response in real time David. (You are hitting them down as soon as I put them up - How great is that?! :)
I still didn't lock in on the logic here though. The question is asking: "Can we decide the true mean return is greater than Zero with 95% confidence?"
Thinking out loud...
My problem is at the end of the process. After we computed the Test Statistic at 1.469 and realized we need to compare it to 1.65 -> at this point, how do you determine if the answer to the question requires the Test Statistic to be smaller or greater than the critical value. It seems I am...
This kind of ties to another question I raised but I think it will be good to flush out the differences and similarities between these two metrics as I have been searching through the forum and haven't been able to find a thread that discusses this topic.
I did find online a resource...
Would you please explain how your calculation of 2 x 30% x (1-30%)=42% for the question in bold? Specifically why are you multiplying 3% times 2 and no simply 30% times 70%?
You own two bonds. Both bonds have a 30% probability of defaulting. Their default probabilities