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What is Normal Distribution in Financial Markets
The normal distribution is a continuous probability distribution that is symmetrical around its mean. In risk management, it is most widely employed.
What is Correlation?
Correlation measures the strength of the linear relationship between two variables and is always between -1 & 1
What does Volatility Mean?
Volatility is a statistical measure of a security’s or market index’s return dispersion. The more the volatility, the riskier the security
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Treynor Ratio
The Treynor Ratio is a performance indicator that shows how much excess return a portfolio created for each unit of risk it took on.
Mortgage Backed Securities & its Importance
Mortgage-backed securities, called MBS, are bonds secured by home and other real estate loans. MBS is a product of Asset-Backed Securities.
Counterparty Risk: Definition, Types and How Finance Professionals Manage It
Counterpart risk is defined as the risk that a counterparty is unable or unwilling to live up to its contractual obligations
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Foreign Currency and Local Currency Defaults
Foreign currency defaults occur when countries fail to repay debt, while local currency defaults often result from inflation.
Futures Contract
Futures Contract – Financial institutions use Hedging to increase financial stability and reduce the risk of financial distress.
LOGIT models
LOGIT model is rom the Generalized Linear Model (GLM) family. It is primarily widely used as a statistical tool to predict default
Mean Reversion
Mean reversion is the tendency of a variable to revert to a long-term level, which can also be called an unconditional mean.
What is Risk Appetite?
Risk appetite refers to the level (and types) of risk that a firm is willing to retain.
Correspondent Banking
Respondent banks with no international presence can use cross-border correspondent connections to operate in jurisdictions to which they don’t have access