I really could not get the mathematics on why volatility of total return will be smaller. Can somebody help me to get better understanding?

Hi andste, can you provide me some more related forum for this sort of discussion? More importantly, I need some more expert discussion forum for "Portfolio Attribution" I have somewhat feeling that Wilmott forum may not be the best place for this kind of discussion Thanks,

QuoteAnd what effects would a high rate of inflation have on a currency?I think, at this point it is more important for US to stop defaulting. Inflation can be controlled by some other means, however any default by US government will have big cascading effects throughput the Globe, NO?Thanks

<t>QuoteNo, there are two different agencies that are responsible for the two tasksDo you please be little bit detail on that 2 separate agencies? Isn't it true that both agencies come under US President's rule?I am not US citizen therefore may not know everything. Therefore would appreciate if you ...

<t>In any typical textbook it says that T-bill/bond is always safe because home country can always print money to honor that. Then how does current debt crisis arise? If US government can not borrow money (due to it's ceiling) to pay it's bill then it can always print dollar right? Or I am missing s...

Trick question means? I was studying Futures/forward contract, and somehow this question came into my mind. However standard books like Hull perhaps does not have any direct answer on that.

Dear all, suppose a bank has a forward contract where to sell 1mn USD to buy 0.75mn EUR. In this case how to determine what is this bank's exposure amount? I really appreciate if somebody explains me.What could be the case if just opposite happens?Thanks,

<t>Hello all, can somebody teach me what is meaning of 'Premium is margined' in context of options contract? Does it mean that, when I buy such option, premium goes to my margin account (not to the writer directly) and I will accrue interest as long as I don't exercise this option? Once I exercise t...

Thanks frolloos

<t>Dear all, I am aware of the BSM equation that must be followed by any derivative. My question is if the derivative is path-dependent then also that equation is valid? I am asking because, I understood that, on the derivation of that equation, derivative is assumed to dependent of St only (and of ...

<r>Dear experts, I am seeking a newbie help on understanding binomial tree construction from Hull, page 392 (I have uploaded a snapshot of that page here: <URL url="http://www.2shared.com/photo/nIw4omBd/Hull.html">http://www.2shared.com/photo/nIw4omBd/Hull.html</URL>). I understand that according to...

It is not any problem with obsession as such. I am working on developing some naive package with VBA, so I want to bring **some consistency** in declaring the position type, that's it. Thanks,

In a vanilla interest rate swaps contract, the party paying fixed interest is assumed to have long position in that swaps. However what about vanilla currency swaps? How I can determine what is my position type, long or short? Is there any acceptable view on that?Thanks,

<t>You put the double-quote at the wrong place. write:read.csv(file="mycsv.csv",head=F,sep=",")## not thisread.csv("file=mycsv.csv",head=F,sep=",")In this case R understands that your directory name is "file=mycsv.csv" (as it is the 1st argument in the read.csv() function), ofcourse it is not there,...

<t>Dear all, I am new in finance domain and would like to ask one fundamental question:Suppose I have 2 instruments and the difference of the payoff at time T is a "definite figure" like say 'K1 - K2'. Then is it true that the difference of their values at present time will be the discounted value o...