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Chapter 6. Variable interest rates and portfolio insurance. Manual for SOA Exam FM/CAS Exam 2.
 

Summary: 1/2
Chapter 6. Variable interest rates and portfolio insurance.
Manual for SOA Exam FM/CAS Exam 2.
Chapter 6. Variable interest rates and portfolio insurance.
Section 6.2. Arbitrage.
c 2009. Miguel A. Arcones. All rights reserved.
Extract from:
"Arcones' Manual for the SOA Exam FM/CAS Exam 2,
Financial Mathematics. Fall 2009 Edition",
available at http://www.actexmadriver.com/
c 2009. Miguel A. Arcones. All rights reserved. Manual for SOA Exam FM/CAS Exam 2.
2/2
Chapter 6. Variable interest rates and portfolio insurance. Section 6.2. Arbitrage.
Arbitrage
In economics, arbitrage is the practice of taking advantage of a
state of imbalance between two (or possibly more) markets by a
combination of matching deals to make a profit. A simple case of
arbitrage consists in buying something in one place and selling it in
another place at the same time. Suppose that the exchange rates
(after taking out the fees for making the exchange) in London are

  

Source: Arcones, Miguel A. - Department of Mathematical Sciences, State University of New York at Binghamton

 

Collections: Mathematics