Search results
Results From The WOW.Com Content Network
That is, if portfolio always has better values than portfolio under almost all scenarios then the risk of should be less than the risk of . [2] E.g. If is an in the money call option (or otherwise) on a stock, and is also an in the money call option with a lower strike price.
Financial econometrics is the branch of financial economics that uses econometric techniques to parameterise the relationships identified. Mathematical finance is related in that it will derive and extend the mathematical or numerical models suggested by financial economics.
In a discrete (i.e. finite state) market, the following hold: [2] The First Fundamental Theorem of Asset Pricing: A discrete market on a discrete probability space (,,) is arbitrage-free if, and only if, there exists at least one risk neutral probability measure that is equivalent to the original probability measure, P.
The term "financial management" refers to a company's financial strategy, while personal finance or financial life management refers to an individual's management strategy. A financial planner , or personal financial planner, is a professional who prepares financial plans here.
In decision theory, the Ellsberg paradox (or Ellsberg's paradox) is a paradox in which people's decisions are inconsistent with subjective expected utility theory. John Maynard Keynes published a version of the paradox in 1921. [1]
An axiom, postulate, or assumption is a statement that is taken to be true, to serve as a premise or starting point for further reasoning and arguments. The word comes from the Ancient Greek word ἀξίωμα (axíōma), meaning 'that which is thought worthy or fit' or 'that which commends itself as evident'.
Adenza Group, Inc. is a software application provider specializing in capital markets, investment management, central banking, risk management, clearing, collateral and treasury & liquidity. Their integrated suite of trading and risk applications is used by banks and other financial companies.
The four axioms of VNM-rationality are completeness, transitivity, continuity, and independence. These axioms, apart from continuity, are often justified using the Dutch book theorems (whereas continuity is used to set aside lexicographic or infinitesimal utilities). Completeness assumes that an individual has well defined preferences: