What is the source of basis risk and how it can be minimised ??
How risks such as delta, vega, gamma. vega , rho, and theta can be manged ?
what is mva ?
Just need to learn Delta hedge, the rest of “Greeks”, know concept will be enough.
Market Value Added
MVA is the value added to a business since it was formed, over and above the money invested in the company by shareholders and long term debt holders.
2003 Ve = $25m
2004 Ve = $40m
Rights issue in 2004 = $5m
MVA = $40m – $25m – $5m = $10m
you are required to calculate the delta hedge on how you do riskless portfolio…
I know the concept of basis risk but i am having a difficulty in using it. When determining the futures closing price, whether the basis points adds up in the futures price or deducted from the futures price? Kindly help me.
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