Capital Market Line
Capital Market Line was developed in the 1960s. It is a graphical representation of all portfolios that combine risk ...
What is the Normal Distribution?
The normal distribution is a continuous probability distribution that is symmetrical around its mean. In risk managem...
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...
Treynor Ratio
The Treynor Ratio is a performance indicator that shows how much excess return a portfolio created for each unit of r...
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 As...
Foreign Currency and Local Currency Defaults
The risk of a country defaulting on its debt is one indicator of its risk.
Futures Contract
Futures Contract - Financial institutions use Hedging to increase financial stability and reduce the risk of financia...
LOGIT models
LOGIT model is rom the Generalized Linear Model (GLM) family. It is primarily widely used as a statistical tool to pr...
Mean Reversion
Mean reversion is the tendency of a variable to revert to a long-term level, which can also be called an unconditiona...