When the errors in a linear regression show signs of positive autocorrelation, which of the statements below is true?
Let X be a random variable normally distributed with zero mean and let . Then the correlation between X and Y is:
In a portfolio there are 7 bonds: 2 AAA Corporate bonds, 2 AAA Agency bonds, 1 AA Corporate and 2 AA Agency bonds. By an unexplained characteristic the probability of any specific AAA bond outperforming the others is twice the probability of any specific AA bond outperforming the others. What is the probability that an AA bond or a Corporate bond outperforms all of the others?
An underlying asset price is at 100, its annual volatility is 25% and the risk free interest rate is 5%. A European call option has a strike of 85 and a maturity of 40 days. Its Black-Scholes price is 15.52. The options sensitivities are: delta = 0.98; gamma = 0.006 and vega = 1.55. What is the delta-gamma-vega approximation to the new option price when the underlying asset price changes to 105 and the volatility changes to 28%?
The determinant of a matrix X is equal 2. Which of the following statements is true?
Identify the type and common element (that is, common ratio or common difference) of the following sequence: 6, 12, 24
The bisection method can be used for solving f(x)=0 for a unique solution of x, when
What is the indefinite integral of the function f(x) = ln(x), where ln(x) denotes the natural logarithmic function?
You want to test the hypothesis that a population parameter β of a regression model is zero. Your alternative hypothesis is that β≠0. Denote by SD(β) the estimated standard deviation of β, and by MEAN(β) the estimated mean of β. Which test statistic is appropriate, and what is its distribution?
