Critically discuss the application of EWMA, GARCH and asymmetric GARCH models to volatility estimation in financial engineering.

Q: Describe Asset/Liability Models and explain why it is better than Value-at-Risk Models for Portfolio…

A: The process through the use of assets and liabilities are managed in such a way that the risk of…

Q: explain efficient Market Hypothesis" and "Behavioral Finance" briefly.

A: Efficient market hypothesis (EMH): The efficient market hypothesis (EMH), too known as the efficient…

Q: Explain the Opportunistic Investing strategies?

A: Opportunistic investing strategies are strategies that involve investment in highly risky…

Q: What advantages does the forecasted financial statement method have over theAFN equation for…

A: Answer: AFN stands for “Additional funds needed” which is used to measure the amount of external…

Q: Why does financial planning usually equated with projections?

A: Financial planning is a stage process way of accomplishing individual's lifestyle goals. A financial…

Q: Monte Carlo methods is more advantageous with more uncertainties of data in the financial market. It…

A: Monte Carlo simulations are used to estimate the likelihood of various outcomes in a process that…

Q: How did financial management influence your capsim simulation.

A: The planning, organizing, directing, and controlling of a company's financial activities, such as…

Q: question is related to FINANCIAL RISK MANAGEMENT

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Assist in showing the steps involved in financial forecasting

A: Predicted financial outcomes: Future events may be forecasted by looking at past and current affairs…

Q: Briefly explain the difference between liquidity, solvency, and profitability analysis.

A: Financial ratios are the metrics used to evaluate the liquidity, profitability, solvency and overall…

Q: Define Liquidity Analysis?

A: Liquidity analysis is very essential as it shows the ability of the firm in paying short-term bills.…

Q: Explain the relationship between risk and return in portfolio management!

A: Risk refers to an adverse possibility of something to get happen. Risk is the possibility of loss.…

Q: Define volatility value.

A: Volatility is a rate at which the cost of a security increments or diminishes for a specified set of…

Q: Using examples, explain how firms are affected by both systematic and firm-specific risk. What is…

A: There are two types of risk systemic risk and firm specific risk.

Q: Explain Financial Engineering?

A: Introduction: Financial engineering is nothing but application of quantitative methods in financial…

Q: which of the following headings best describes and measures gearing : a- financial position (risk)…

A: Gearing ratio is a financial ratio which compares equity of a company to its debt. Gearing ratio =…

Q: Explain Minsky’s Financial Instability Hypothesis and mention the assumptions of the model.

A: The financial instability model hypothesis is a financial and economical model that has been…

Q: Describe the relation between Risk and Returns that was introduced by Harry Markowitz

A: Modern portfolio theory, or MPT, is referred to as the method for portfolio management for reducing…

Q: discuss the important of financial market, then illustrate with a diagram the flow

A: Financial market is that place where the trading of securities takes place. Financial market…

Q: What is CAPM and how it used in portfolio management?

A: Risk and return are the two main parts of any investment and before investing in any security or…

Q: How do managers, bankers, and security analysts use (a) trend analysis, (b) benchmarking,(c) percent…

A: Introduction: Usually a managers, bankers, and security analysts use financial tools and techniques…

Q: What is Trend Analysis in Financial Analysis?

A: Trend analysis: A trend analysis is determined by comparing the change or percentage change, which…

Q: Suggest what is the best financial instrument to offset market risk exposure and from market…

A: The question is based on the concept of hedging the market risk and volatility by use of a proper…

Q: What role does the pro forma balance sheet play in financial forecasting

A: A pro forma balance sheets, are used to project how a company will manage its assets in the future.…

Q: Which one of the following is the formula that explains the relationship between the expected return…

A: The risks which is common for all business entities operating in the economic environment then the…

Q: predict

A: Financial planning is always a challenging task for nay company & the things become even more…

Q: Could you explain the term "financial risk" in simple terms

A: Financial risk - The risk of losing money on an investment.

Q: How do managers, bankers, and security analysts use trend analysis, bench-marking, percent change…

A: Usually a managers, bankers, and security analysts use financial tools and techniques to measure and…

Q: Why are covariance and correlation concepts so important in portfolio analysis?

A: In portfolio theory covariance is important since the portfolio variance is a mixture of individual…

Q: An example of asymmetr information in financial markets is that

A: Introduction: The term asymmetric information can be defined as a situation when the knowledge is…

Q: Explain the Hedging against cash flow risk.

A: Hedging is a strategy by which a financial instrument is used to minimize the risk created by the…

Q: What is liquidity black holes?

A: Liquidity is when assets can be easily traded in the market with no compromise in the price of the…

Q: How are financing costs and dividends considered in Scenario Analysis?

A: Net present value (NPV) is computed by subtracting present value of cash outflows from the present…

Q: Briefly discuss CAPM from the standpoint of investors and managers.

A: The Capital Asset Pricing Model (CAPM) is the financial model which shows the relationship between…

Q: Risk Ratios

A: Average collection period = 365 * ((Opening accounts receivable + Closing accounts…

Q: Define Financial leverage.

A: Leverage: Leverage measures overlook the mixture of debt and equity which is required for analyzing…

Q: Which are functions of financial markets? Check all that apply: O Maturity intermediation Risk…

A: Financial markets are important in the economy of country and they play very bigger role in the…

Q: What is Vertical  Analysis in Financial Analysis?

A: Financial Statement- Financial statements describe an entity's financial activity and condition. At…

Q: What is the CAPM beta? How is it different from Cash Flow beta? Provide intuitive explanation and…

A: Beta is an important component of the CAPM- capital asset pricing model, which calculates the cost…

Q: The relationship between financial management and microeconomics

A: Financial management - Financial management refers to making plans, organizing, controlling, and…