Risk-neutral measure — In mathematical finance, a risk neutral measure, is a prototypical case of an equivalent martingale measure. It is heavily used in the pricing of financial derivatives due to the fundamental theorem of asset pricing, which implies that in a… … Wikipedia
Risk Neutral — Indifference to risk. The risk neutral investor would be in the middle of the continuum represented by risk seeking investors at one end, and risk averse investors at the other extreme. Risk neutral measures find extensive application in the… … Investment dictionary
Risk — takers redirects here. For the Canadian television program, see Risk Takers. For other uses, see Risk (disambiguation). Risk is the potential that a chosen action or activity (including the choice of inaction) will lead to a loss (an undesirable… … Wikipedia
Risk aversion — is a concept in psychology, economics, and finance, based on the behavior of humans (especially consumers and investors) while exposed to uncertainty. Risk aversion is the reluctance of a person to accept a bargain with an uncertain payoff rather … Wikipedia
Delta neutral — In finance, delta neutral describes a portfolio of related financial securities, in which the portfolio value remains unchanged due to small changes in the value of the underlying security. Such a portfolio typically contains options and their… … Wikipedia
Fundamental theorem of arbitrage-free pricing — In a general sense, the fundamental theorem of arbitrage/finance is a way to relate arbitrage opportunities with risk neutral measures that are equivalent to the original probability measure.The fundamental theorem in a finite state marketIn a… … Wikipedia
Heston model — In finance, the Heston model is a mathematical model describing the evolution of the volatility of an underlying asset. It is a stochastic volatility model: such a model assumes that the volatility of the asset is not constant, nor even… … Wikipedia
India — /in dee euh/, n. 1. Hindi, Bharat. a republic in S Asia: a union comprising 25 states and 7 union territories; formerly a British colony; gained independence Aug. 15, 1947; became a republic within the Commonwealth of Nations Jan. 26, 1950.… … Universalium
Precautionary principle — The precautionary principle is a moral and political principle which states that if an action or policy might cause severe or irreversible harm to the public or to the environment, in the absence of a scientific consensus that harm would not… … Wikipedia
Monte Carlo methods in finance — Monte Carlo methods are used in finance and mathematical finance to value and analyze (complex) instruments, portfolios and investments by simulating the various sources of uncertainty affecting their value, and then determining their average… … Wikipedia
