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Omitted variable bias occurs when the omitted variable iscorrelated with the included regressor and is a determinant of the dependent variable.
volatility
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Short hedge position=Long the basis
Hedging is to for sure that the change of the interest rate will not infect the value of the contract.
Benefit依次是：0、、1、
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利率由前一个swap date决定
6-month LIBOR的表示方法，依然是年华的，需要折算
Current balance is the PV of the pool.
Option value is ＄300000, option quantity is 100000.
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Put call parity中的所有项，都是0时刻的PV
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17. The chief risk officer of an international bank is instructing his direct reports on best practices for conducting country risk analysis and presenting the findings to senior executives. Which of the following recommendations would be considered the most questionable"
A. Risk analysis should be consistent, using rigorous frameworks that allow for valid cross-county comparison.
B. Risk reports should be concise, with easy to understand conclusion that have sufficient detail to make them meaningful.
C. Risk reports should be informative, providing the end user the rationable behind any assessment without and "black boxes’ that are difficult to understand.
D. Risk analysis should be open –ended, presenting several scenarios and taking no particular position on any issue that could bias decision-makers.
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变的-不变的*conversion factor(对应的)