Recent content by the4thamigo_uk

My (probably misguided) intuition says the following : 'Take a closed loop of wire and bend it into any arbitrary shape so that it lies flat on a table. stretch a membrane over it (i.e. a soap membrane say). Then, I should be able to vibrate it at just the right frequency to generate (at least)...

Ive been working with random variables for a while and only today have I come up with a basic question that undermines what I thought I knew... If I have two random variables X and Y, when am I allowed to multiply them? i.e. Z=XY Let S_1 and S_1 be sigma algebras such that S_1 is contained in...

Ok, so the quotes are clean... 31st may is maturity, this is about 10 weeks ~ 70 days, so I add 70/180 of the coupon onto the clean price of the bonds i.e. taking the bid price we get dirty/cash prices of 100.1250 + .75/2 * (180-70)/180 = 100.3542 100.8750 + 4.75/2 * (180-70)/180 = 102.3264...

Ive been looking at quotes for two US government bonds maturing on 31/5/2012. I am trying to understand why they differ so much? Maturity Coupon Bid Asked Chg Asked Yield 5/31/2012 0.750 100.1250 100.1328 0.0078 0.045 5/31/2012 4.750 100.8750...

Ok I got it now... thanks a lot for your help

Thanks BWV. The explanation for C makes a lot of sense now. I am not so clear about the explanation for A though. I can intuitively see that if I lock money away for a longer period I should expect a greater return, but how does the duration formula show this? For the two bonds I have...

I came across this question in chapter 4 of Hull 'Options Futures and other Derivatives'. I have the answer but I am not sure what the explanation is. Could anyone help? The term structure of interest rates is upward sloping. Put the following in order of magnitude : a) the 5 year zero...

Yes I understand the situation and the combinatoric proof, but how would I formally prove it?

Homework Statement If (N,R) indicates number of combinations of R objects selected from set of N objects N >=r then prove : R E (N,r) x (M,R-r) = (N+M, R) r=0 E specifies the usual capital sigma notion for a sum.The Attempt at a Solution Just don't know how to tackle this? Inductive...

Aha stupid me... I now note that inv(X)' = inv(X')

Homework Statement Prove that if A is skew-symmetric (i.e. A = -A') then (I - A) . inv(I + A) is orthogonal, assuming that (I + A) is singular. inv(X) denotes inverse matrix of X. X' denotes transpose of X. The Attempt at a Solution I need to prove...

In standard economics I read that the purchase of a car by a household is considered a consumer good. This is because the car is used for personal purposes and not to increase production. But what about domestic housing? Is this considered a consumer durable for the same reason?

Cheers glen you are a star... understood... :o)

Thanks Glen. On the surface of it these identities seem so (deceptively) simple, but the key to real understanding isn't the formulae it is the definition of the terms. Now if I consider a simple extension to your medieval farm example. Let's say we have a king who demands a 5% tax on all...

For a very readable book I would recommend 'Macroeconomics Understanding the wealth of Nations' by Miles and Scott. Its used for the economics component of a lot of MBA courses in the UK. It is not heavy on algebra but has a the main key formulae and models. I personally think its good to get...