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Contents

Abstract                                                             ii

Acknowledgements                                          iv

List of Figures                                                       ix

List of Tables                                                        xi

1 Introduction                                                       1

1.1 Overview.................................. 1

1.2 Outline................................... 3

2 Background and Literature Review                              4

2.1 Financial background and literature review............... 5

2.1.1  Financial background....................... 5

2.1.2  Literature review......................... 10

2.2 Basic statistical concepts......................... 13

2.2.1  Indicator function......................... 13



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