Question 5. Trade question. Please answer below. A. Suppose your trades are all

Question

Question 5. Trade question. Please answer below.

A. Suppose your trades are all for a notional amount of $100,000 and your counterparty delivers a day late once every fifty trades. At an annual interest rate of 5%, how much money does this save you if you make 1,000 trades per year? 50,000 trades per year(about 200 trades/day)?

B. Your counterparty goes bankrupt. Assume half your trades were sells and settlement happens on a T+3 horizon. How much money is now at risk for 1,000 and 50,000 trades per year?

Explanation / Answer

Question 5. Trade question. Please answer below. A. Suppose your trades are all

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.