Exercises

  1. If the APR is 5% compounded quarterly, what is its equivalent continuously compounded rate?
  2. The value of a portfolio is $4.77 million today with a beta of 0.88. If the portfolio manager explains the market will surge in the next three months and s/he intends to increase her/ his portfolio beta from 0.88 to 1.20 in just three months by using S&P500 futures, how many contracts should s/he long or short? If the S&P500 index increases by 70 points what will be her/his gain or loss? How about if the S&P500 falls by 50 points instead?
  3. Write a Python program to price a call option.
  4. Explain the empty shell method when writing a complex Python program.
  5. Explain the logic behind the so-called comment-all-out method when writing a complex Python program. ...

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