Explain whether the historical evidence supports the use of a normal model or a lognormal model
What will be an ideal response?
The support for a normal model or a lognormal model depends on the current level of interest rates as described below.
Empirical evidence reviewed regarding the relationship between interest-rate volatility and the level of rates suggests that the relationship is weak at interest rate levels below 10%. However, for rates exceeding 10%, there tends to be a positive relationship. This evidence suggests that in rate environments below 10%, a normal model would be more descriptive of the behavior of interest rates than the lognormal model. Moreover, empirical tests suggest that the impact of negative interest rates on pricing is minimal, and therefore one should not be overly concerned that a normal model admits the possibility of negative interest rates.
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Japan has established trade barriers in the form of tariffs against
A. U.S. beef, citrus, and dairy products. B. European automakers. C. Chinese vegetables and fruits, but not rice. D. European electrical goods.
What are the objectives of application controls?
The overriding purpose of a news release is ________
A) to encourage journalists and editors to consider covering a story B) to inform a targeted public–rather than the media–about what an organization is doing C) to create a document of record about what an organization is doing D) to justify the public relations function in an organization
Decision making and problem solving are not related
Indicate whether the statement is true or false