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Hi I'm confused with fat tails in a return distribution & conditional and unconditional distribution 1. p 9. "but fat tails could be explained by a conditional distribution" →i thought conditional distribution is normal so it could be explained , is it right? 2. p.9 "time variations in...

Hi I'm confused with question 505.2 ( Three months ago, a US corporation issued a floating-rate note (FRN) that pays its first coupon in three months and matures in five years. The index (aka, reference rate; eg, six-month LIBOR) was 1.20% at the time of issuance but has dropped to its current...

Hi Q.505.1 The dirty price of the bond on April 1st, 2015 = $111.78 In order to compute the dirty price of the bond on September 1st, 2015 (the settlement date): we assume reinvestment of the dirty price of the bond on April 1st 2015 such that: Dirty price of the bond on September 1st, 2015 =...

ch10. stationary time series p.21 Invertibility: If the inverses of all roots of (L) are inside the unit circle,~~ 1. what is roots?? 2. i don't understand exactly what "invertibility/invertible" mean. please explain in detail

p.8 "In the case when the buyer collateralizes all the underlying instruments, then there is no risk of default. In this case, the bank's floating payment would equate to the bank's funding cost. If the buyer uses leverage, then the floating payment is the funding cost and a spread. This...