# Tagged Questions

Questions having to do with financial mathematics. Please note that for questions in quantitative finance, quant.stackexchange.com is perhaps a better site.

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### Theory of Interest - Going from discount rate - annual effective and nominal to force of interest

[![Force of Interest & Discount Rate][1]][1] Hi there guys, I'm new to Theory of Interest and I might have started studying a bit too late, but I really need to just grasp this before the end of ...
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### Proving implications of equations

I'm currently working on the finance problem: If we define $I_k$ = A(k)-A(k-1) then $\sum_{k=1}^n I_k$ = A(n) - A(0) show that this implies $\sum_{k=1}^n i_ka(k-1)$ = a(k)-1 So I know that our top ...
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### Finance and effective interest rate

I'm trying to solve a finance question, and am getting slightly confused. The question is as follows: On Jan. 1st, 2000, 3500 dollars is deposited into a bank account. On Jan. 1st 2005, 4000 dollars ...
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### Is there a more rigorous way to show the expected price of a stock?

I am studying for the Society of Actuaries' Financial Math exam and I found the solution to this practice problem to be not convincing enough: Is there a more mathematical / rigorous way of showing ...
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### How to construct a linear demand equation? and obtain the weekly revenue

Two fraternities, Sig Ep and Ep Sig, plan to raise money jointly to benefit homeless people on Long Island. They will sell Yoda vs. Alien T-shirts in the student center, but are not sure how much to ...
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### Continuous Sigma-martingales and local martingales are equivalent sometimes?

I was reading through this paper, and they mentioned in the beginning-most portion of it that $\sigma$-martingales and local-martingales are equivalent if they are continuous. Why must they be ...
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### Currency conversion using available rates

I have the following rates available: USD -> USD = 1 USD -> EUR = 0.887662 USD -> GBP = 0.654514 I want to calculate the following rates ...
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### Clarification on the set-up of this interest theory problem

The following problem and solution is taken from an actuarial exam (financial math) study manual: I would set this problem up completely different. I think it would be necessary to consider the ...
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### Isolate Costs in NPV equation

Hey can anyone help with this? This is the classic NPV equation: NPV = -CapEx + ∑ (Revenue − Costs) / (1+Discount)^i The partial sum is from i = 0 to n years. For my purposes all the elements ...
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### About the boundary conditions of the Black-Scholes-Merton PDE

I have a question about the solution of the Black-Scholes PDE for the European call option when I read the book Stochastic Calculus for Finance II of Steven E.Shreve. Let $c(t,x)$ be the value of the ...
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### Evaluating NPV caluclators

I'm working on a Net Present Value set of problems and would appreciate someone else's insight as my Excel calculations are coming up differently than other online calculators for NPV. I've read on ...
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### Strange Monte Carlo Sampling Phenomena

I am running a Monte Carlo simulation to price call and put options, and observe a strange correlation between the number of sampling points and the standard deviation. It makes sense that as the ...