A typical leptokurtotic distribution can be described as a distribution that is relative to a normal distribution
A quadratic form is
In a binomial tree lattice, at each step the underlying price can move up by a factor of u = 1.1 or down by a factor of . The continuously compounded risk free interest rate over each time step is 1% and there are no dividends paid on the underlying. The risk neutral probability for an up move is:
Find the first-order Taylor approximation p(x) for the function: at the point .
When the errors in a linear regression show signs of positive autocorrelation, which of the statements below is true?
Which of the following statements about variance and standard deviation are correct?
1. When calculated based on a sample of the population data, one has to correct for any bias in the result by using the number of degrees of freedom in the calculation
2. Variance is in square root units of the underlying data, whereas standard deviation is in units of the underlying data
3. When considering independent variables, variance is additive, while standard deviation is not
The Newton-Raphson method
A 2-year bond has a yield of 5% and an annual coupon of 5%. What is the Macaulay Duration of the bond?
An indefinite integral of a polynomial function is
The gradient of a function f(x, y, z) = x + y2 - x y z at the point x = y = z = 1 is
