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Quantitative Finance : Recent Questions and Answers (Page 11)

Find answers to your questions about Quantitative Finance or help others by answering their Quantitative Finance questions.

Cashflow Risk vs Discount Risk

Studying asset pricing, I often hear the terms cashflow risk and discount risk but I'm not sure what they mean? The Campbell/Shiller (1988) decomposition includes cashflows (future dividends) and discount...

Asked on 10/27/2021

2 answer

Is it always better to use the entire distribution of a financial returns series, not just $mu$ and $sigma$?

In finance models that use historical returns for inputs, including option pricing models, forecasting and portfolio optimization, only the statistical moments of the returns distribution, $mu$ and $sigma$...

Asked on 10/27/2021

1 answer

Downloading Historical Data from Finam.ru

I am looking for free historical intraday data (e.g., 30 mins, 1 hour) and I have came up to this website finam.ru, which is in Russian but it can be...

Asked on 10/27/2021 by Jack_T

1 answer

Joint Distribution of Correlated Variables with Markov Switching

I am modeling a portfolio of correlated assets whose lack of liquidity can be reasonably described by a Markov-switching model. That is, not only is movement size among assets correlated,...

Asked on 10/27/2021 by CasusBelli

0 answer

Why are these deep in-the-money FLEX options seemingly bought at a discount?

98% of the initial reference value is .98 x 267.88 dollars,...

Asked on 10/27/2021 by Derek Shen

2 answer

Confusion about replicating a call option

Assume standard Black-Scholes model,$$dS(t)=S(t)(rdt+sigma dW(t))$$where $sigma$ is a constant and $W(t)$ is a Brownian motion under the risk neutral measure.A call option is replicable,...

Asked on 10/27/2021

2 answer

What can one do with cross-sectional relationships?

This is somewhat of a broad question, but I think we all would like to find signals that predict something in the future. However, often times, we are just...

Asked on 10/26/2021

0 answer

What is the disadvantage using the edge ratio?

I want to evaluate and optimize an algorithmic trading system.For this I want to follow a step by step approach - first looking at the entry, later at other...

Asked on 10/26/2021 by Claudia Rosso

2 answer

Are there stocks dynamic that cannot be represented by Generalized Black Scholes model?

The generalized Black Scholes Model refers to a stock dynamic that satisfy $$dS(t)=S(t)(mu_t dt+ sigma_t dW(t))$$ By martingale representation theorem, it seems that if there is a...

Asked on 10/26/2021 by Preston Lui

1 answer

Is there a reason why futures and options have more substitutes than other financial instruments?

This is somewhat non-technical question, but it seems like this forum is still the best place for it. I'm reading Shleifer's Inefficient Markets, where he points out that [...] for...

Asked on 03/11/2021 by lithium123

1 answer

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