What is “implied volatility”, how is it calculated, and how can it be used?

Q: What does the volatility value represents?

A: Volatility for a given product or market index is a factual proportion of the scattering of profits.…

Q: WHAT IS THE VALUE OF DISCOUNTED FLOWS

A: As per Time value of money, there are present values as well as future values.

Q: What are the advantages of balance sheet?

A: Financial Statement:   A financial statement is the complete record of financial transactions that…

Q: w does expected shortfal

A: Introduction : Value at risk (VaR) can be understood as the metric that measures the magnitude of…

Q: liquidity risk?  Define briefly with an appropriate example

A: Risk means uncertainties in the future. There is a high risk involved in every investment because…

Q: What does liquidity mean?

A: Liquidity:

Q: o risk premiums influence financial decisions regarding risk and re

A: Step 1 A risk premium is an investment return that is expected to generate more than the level of a…

Q: What is financial risk, and how does it arise?

A: Answer: Usually, financial risk refers to a situation where a company is not able to pay its fixed…

Q: Define Liquidity Analysis?

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

Q: What is arbitrage?

A: Arbitrage It is the buying and offering of an asset to benefit from a distinction within the cost…

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: 1. What causes volatility? Explain the basic assumption and research supported view.

A: Volatility is price variability of an asset. Risky assets' prices go up and down and that is called…

Q: What is Market Value Added (MVA)?

A: The market value added is the difference of the current value of the company and the equity capital…

Q: what does Market's Risk premium measure

A: Market's Risk premium is an important term used in the capital asset pricing model equation (CAPM)…

Q: What is the risk premium?

A: CAPM is the method of calculating the expected return on investment. The formula to calculate the…

Q: What do the Liquidity ratios show?

A: Ratio analysis: The analysis of a company using the financial ratios and comparing its trends and…

Q: What is the quantitative disclosure of lessor?

A: Definition: Lease: Lease is a contractual agreement whereby the right to use an asset for a…

Q: define volatility

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

Q: What is risk return ratio?

A: Any susceptibility a corporation or organization has to factors that might affect profitability or…

Q: What is payout period and how is it calculated?

A: Companies employ various methods in the process of selection of the most financially appropriate…

Q: Define the term s liquidity position?

A: Definition: Liquidity: Liquidity is the capability of a company to pay the short-term liabilities…

Q: What is market risk?

A: Investments in assets are subject to risks and uncertainty of returns  Risks can be systematic or…

Q: What is the difference between pure arbitrage and risk arbitrage?

A: Pure arbitrage refers to make a riskless profit without taking any risk while risk arbitrage refers…

Q: What is market risk premium?

A: Market risk premium is an additional return investor will receive for holding the additional risk in…

Q: why is there a trade-off between liquidity and solvency?

A: A firm may raise capital through different sources, including equity shares, preference shares,…

Q: Explain Comparing Risk Premiums?

A: Risk premium is additional premium an investor achieves by investing in a riskier financial…

Q: What is present value interest factor?

A: The present value interest factor is a mathematical equation used to estimate today's value of money…

Q: How does measure liquidity?

A: The transactions of the company will be analyzed by the management, and it will be recorded in…

Q: Is statistical arbitrage true arbitrage? Explain.

A: Statistical arbitrage refers to the strategy in which investor tries to make profit due to the…

Q: What is idiosyncratic risk? How does it differ from market risk?

A: Idiosyncratic risk or unsystematic risk or specific risk is that risk which belongs to specific…

Q: Define cost of equity? How does it relate to the ‘required rate of return’ (r) on equities?

A: Definition of Cost Equity: Cost of equity is the return that a company requires for an investment or…

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: What is value at risk, VaR?

A: Value at Risk (VaR) is a financial metric that estimates the risk of an investment. More…

Q: risk with practical examples

A: Default risk is the risk that a lender takes on in the chance that a borrower will be unable to make…

Q: what is equity analysis?

A: The person who takes the equity capital of the company is known as a stakeholder of the company. The…

Q: What is net present value? How does net preset value work?

A: Net present value:- Net present value is the investment evaluation technique, where we evaluate…

Q: What is the importance of market risk premium?

A: Market risk premium Variance of the market return and the risk-free rate. It depicts the equity…

Q: How are total risk, market risk, and diversifiable risk related?

A: There are different types of risk associated with the investment. Some can be controlled and some…