The Mathematicians and Economists Who Have Been Hired by Wall

question 58

Multiple Choice

The mathematicians and economists who have been hired by Wall Street firms to build mathematical models to aid the pricing of derivatives are generally referred to as

• A)speculators.
• B)hedgers.
• C)rocket scientists.
• D)market makers.

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Definitions:

Outstanding Accounts

Accounts or invoices that have been billed but not yet paid by customers.

EBIT

Earnings Before Interest and Taxes, a financial metric indicating a company's operating profitability by excluding interest and taxes from earnings.

Interest Expense

The cost incurred by an entity for borrowed funds; interest expenses are a non-operational cost affecting the company’s net income.

Times Interest Earned Ratio

A financial metric used to evaluate a company's ability to meet its debt obligations by comparing its income before interest and taxes to its interest expenses.