Why do mutual funds have different classes of shares?
Answer to relevant QuestionsWhat costs are incurred by an investor when purchasing a mutual fund? Explain why in practice arbitrage-free models are typically used rather than equilibrium models. Answer the below questions. (a) Why is the most common interest-rate model used to describe the behavior of interest rates a one-factor model? (b) What is the one-factor in a one-factor interest-rate model? In Robert Litterman, Jose Scheinkman, and Laurence Weiss, “Volatility and the Yield Curve,”Journal of Fixed Income, (Premier Issue, 1991), p. 49, the following statement was made: “Many fixed income securities (e.g., ...Under what conditions would the traditional yield spread be close to the static spread?
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