Suppose we have n points on a line, where the ith point (from 0 to n-1) is at position x = i, we have to find the number of ways we can draw exactly k different non-overlapping line segments such that each segment covers two or more points. The endpoints of each line segment must have integral coordinates. The k line segments do not have to cover all given n points, and they can share endpoints. If the answer is too large, then return result mod 10^9+7.So, if the input is like n = 4 k = 2, then the ... Read More
Suppose there are n cities and there are some roads connecting these cities. Each roads[i] = [u, v] indicates that there is a two-way road between cities u and v. Now consider network rank is the total number of directly connected roads to either city. When a road is directly connected to both cities, it is only counted once. And the maximal network rank of the network is the maximum network rank of all pairs of different cities. So, if we have different roads, we have to find the maximal network rank of the entire network.So, if the input is ... Read More
American vs. European Stock OptionsAmerican and European stock options have some similar qualities but their differences are equally important. For instance, American-style options owners may exercise their options at any time before the option expires, while European-style options owners may exercise their rights only at expiration or maturity.Most equity options are American-style options and they are traded mainly in an Exchange. However, many broad-based equity indices, such as the S&P 500, deal in actively traded European-style options.There are some major differences between American and European options. Here are some of them.MeaningEuropean Option − European Option lets the option holder the ... Read More
Suppose we have two arrays rowSum and colSum with non-negative values where rowSum[i] has the sum of the elements in the ith row and colSum[j] has the sum of the elements in the jth column of a 2D matrix. We have to find any matrix with non-negative values of size (rowSum size x colSum size) that satisfies the given rowSum and colSum values.So, if the input is like rowSum = [13, 14, 12] colSum = [9, 13, 17], then the output will be9400950012To solve this, we will follow these steps −matrix := create empty matrixvisited := a new setDefine a ... Read More
What is Beta in Finance?The beta (β) of a stock or any other investment security is a calculation of its volatility of returns in comparison to the entire market. It is utilized as a calculation of risk and is an important part of the Capital Asset Pricing Model (CAPM). A stock with a greater beta has greater risk as well as greater expected returns.The beta coefficient can be understood as follows −β = 1 − Beta exactly as volatile as the marketβ < 1 − Beta is less volatile than the marketβ > 1 − Beta is more volatile than ... Read More
An option that has stock as its underlying asset is called a "stock option." There is another type of option that deals in the index, known as the "index option." The payoffs or risk-rewards that are appropriate for stock options are applicable in the case of other options as well as put options.Stock options are a derivative where the underlying asset is a stock, such as RIL or SBI.Stock options have respective sizes, different strike prices, and different times in which they must be executable.Options are like futures, but unlike futures, the profits and losses in options are not linear ... Read More
What is Beta of a Company?The "beta" of a company is an indicator of how sensitive the stock prices of the company are to systematic risk. Systematic risks are usually measured by looking at the return on a "market portfolio, " a portfolio that contains enough stocks and other investment securities. A market portfolio is diversified enough so that all the firm-specific risks are assumed to cancel each other out so that returns are affected only by systematic risks.In other words, the Beta of a company’s stock is relevant to its nature of business, as systematic risks are related to ... Read More
Financial leverage is used to buy more debt to buy more assets. However, an excessive amount of financial leverage increases the risk of failure, as it is more difficult to repay debt. Most of the companies have some level of financial leverage, however caution must be taken not to overdo it. In case of financial leverage, the beta value goes up with increased leverage which may point towards distress or issues with the financials.What is the main advantage of financial leverage?Corporate firms utilize financial leverage mainly to increase the company’s Earnings Per Share (EPS) and to increase its Return On ... Read More
All options have an underlying asset, such as a stock, an exchange-traded fund, or a future, the values of which change over time. The value of an option, therefore, also change along with the underlying asset. Depending on the price of the underlying asset, an option can be in-the-money, outof-the-money, or at-the-money situation. Each of these situations offers an intrinsic value to the option.In-the-Money (ITM) OptionITM option contracts have an intrinsic value.If a call option that offers the buyer the right to buy an asset at a set price before a deadline has an underlying asset the price of which ... Read More
Straddle is an options strategy where the investors buy and sell a put and a call option simultaneously. The type of underlying, expiry date, and strike prices remain the same for the straddle strategy to work. The investors who use the straddle strategy expect something drastic in the market to happen in the future but are unsure whether this will lead to the markets to go up or down.Types of Straddle OptionsStraddle options can be of two types −Long StraddleShort StraddleLong StraddleIn a long straddle options strategy, the investor buys both a long call and a long put option with ... Read More
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