4 Answered Questions for the topic financial economics
Consequences of a positive uncovered interest rate parity (UIP) spread for an emerging market economy?
Empirically we observe that the uncovered interest rate parity (UIP) does not hold; in fact the exchange rate adjusted return on an emerging market bond is higher than the return on US bonds; I... more
Prove that variance of a portfolio cannot exceed variance of individual assets?
When reading on Markowitz's portfolio theory, I stumbled across the fact that in a market with two risky assets, if no short selling is not allowed, the variance of a portfolio consisting of the... more
Why does the profit reaches its maximum value at the equilibrium point?
When we talk about marginal cost and marginal benefit/cost, why does the equilibrium point is the most convenient for the production of a product. If the marginal cost and the marginal... more
Negative probabilities - Can we have negative payments in bonds?
In [Half of a Coin: Negative Probabilities](http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.592.2043&rep=rep1&type=pdf), the author mentions bond duration.Suppose we have payments... more