“When volatility increases, the price of options increase. When interest rates increase, call option prices increase.” why would a call option price increase if interest rates are up?
I think this is for bonds. Call bonds have better rates when interest rates rise than option free bonds.
yorue right. misread options as bonds. that officially is my cue that any studying right now is just hurting me. im outta here. good luck everyone. great work ditch digger, you deserve to crush this thing.
June 09ers! Bookmark this thread. You’ll thank me after exam day!
Bump… Original post is gold.
I had this one bookmarked, very good post.
I read this before I started studying, and understood very little. Now that I’ve studyied a lot it makes a lot more sense. This is offset by the fact that I make about half of these errors…
sbmarti2 Wrote: ------------------------------------------------------- > I read this before I started studying, and > understood very little. Now that I’ve studyied a > lot it makes a lot more sense. > > This is offset by the fact that I make about half > of these errors… Lucky! Only half. I have made almost every one of those errors at least once, if not more.
Bump Recognition goes to the departed ditchdigger2cfa
wow.
bump Use it wisely
I love you guys, I’ve been trying to find this thread forever. I kept searching the wrong thread titles.
really good stuff
This thread is gold. Bumping
GIPS • Only 1 GIPS mention method. No other claim about method or performance calculation with GIPS allowed. • All clients need to be shown compliance presentation. • List and disclosure of composites to prospective clients on request. • GIPS disclosures are static. • Total Assets Include everything. • Highest standard around the world. • Include performance of subadvisor in the performance of composites
Quantitative Analysis • Positive Excess Kurtosis: Analyst will underestimate the chance of very bad or good outcomes. • SF Ratio- return in % • PMT=0 when FV and PV given. • Up move factor=1+%increase when variable goes up • Down move factor=1/up move factor • Probability Function-Sum of all the probability of all outcomes or events that is mutually exclusive and exhaustive is 1. • Covariance shows direction of relationship. • Probability function, p(x) describes the probability that a random variable equals a particular value x. • Probability density function describes a continuous variable. Probability that a random variable will take a single outcome is zero. • A CDF for a discrete/continuous variable gives the probability that a random variable will take on a value less or equal to a specific value, F(x). • Discrete Uniform Probability-all outcomes have same probability. [cumulative distribution for nth=np(x)] • Lognormal distribution always positive, so used to model asset prices. • When normally distributed SF Ratio=t distribution. • CCR=ln(1+HPR)=ln(ev/bv)1/n • HPR=ev/bv-1=eCCRxN-1 • Distribution of “sample statistic” like mean is known as sampling distribution. Also known as probability distribution of sample means from repeated sampling. • Time weighted return used when client has discretionary control over timing and amount. • Chebyshev’s inequality holds regardless of the shape of distribution. • Large samples—low standard error----Statistically significant but not economically.
i got points for other sections as well, if you guys want then I would post those.
Please do post any points you have for Economics, I need all the help I can get! Thanks
From the top of this page: _______ “When volatility increases, the price of options increase. When interest rates increase, call option prices increase.” why would a call option price increase if interest rates are up? Options: Reply To This Message•Quote This Message•Report This Message Re: How the F did I screw that up? The official thread Posted by: ditchdigger2CFA (IP Logged) [hide posts from this user] Date: December 5, 2008 10:09PM I think this is for bonds. Call bonds have better rates when interest rates rise than option free bonds. ____ This also applies to options. The value of a call option rises as interest rates rise as you can postpone the purchase of the underlying and take advantage of high interim interest rates. The opposite applies to put options.
Economics • At equilibrium sum of CS+PS is maxed. • Low marginal returns prove upward SRMC. RTS determines LRAC. • Economically efficient must be technically efficient (but not opposite). • Both inflation caused by repeated expansionary monetary policy. • Monopolists have imperfect info about demand so need to search for price. • MRP(L)=P(L) • Demand for labor less elastic when less labor intensive. • Money Targeting Rule fails because rule assumes stable demand/velocity of money. Being an Eco major I faced less problems in Eco