Muddled Mustafic Melancholic Masculine Majestic Mathematical Monkey

Monday, July 16, 2007

Insert your rance

Oh you know you buy insurance for health protection right.
Welcome to Credit Default Swops. Or Credit Derivatives.
That's what you use when you want insurance from banks or financial institutions against companies whose bonds might have the potential to default. So in the event that they default, you get the maturity value, instead of losing everything.

So using hypothesis testing with a 1 percent level of significance and a whole lot of mathematical theorems, my very smart girlfriend has rejected the hypothesis, proving that the credit spreads in Japanese Yen and Indian Rupees are not equivalent, and there might be a potential of non-arbitrage to occur, i.e. you can make free money by manipulating the spreads to your advantage in Japan and India.

No wonder she endured the likes of Gan Far Fart. Hahahaha.