Leverage Ratio=total assets/equity Here we have used 50$ from equity for cash margin but this will not change equity So equity will remain 100$ only. Total assets v will take at a conservative side. Though derivative trades are contingent liabilities but as we do liquidity mgmt more importantly forRead more
Leverage Ratio=total assets/equity
Here we have used 50$ from equity for cash margin but this will not change equity
So equity will remain 100$ only.
Total assets v will take at a conservative side. Though derivative trades are contingent liabilities but as we do liquidity mgmt more importantly for crises times so we need to take even contingent liab in its full value.
So total assets = 150$ (currency jo lena hi hai) + 200$ (cds sold- in the event of default whole has to be paid) + 50$ (Delta shares) + 50$ cash+ 50$ cash margin=500
This is little unclear.. I think options are incorrect.. Option a should have been the answer. If value of security rises, seller of security or borrower of cash should be at loss because he would borrowed more money or sold less security for the same borrowed amount. On the other hand it's good forRead more
This is little unclear.. I think options are incorrect.. Option a should have been the answer.
If value of security rises, seller of security or borrower of cash should be at loss because he would borrowed more money or sold less security for the same borrowed amount.
On the other hand it’s good for security buyer as he is getting better collateral coverage I. E. Lower LTV
If value of security decreases , vice versa of the above explanation holds.
Answer is c.. but I just need to know the reason of a and b. Why in case of realised forwards, risk premium is not built in and in case unchanged term structure risk premium must be there.
Liquidity and leverage
Leverage Ratio=total assets/equity Here we have used 50$ from equity for cash margin but this will not change equity So equity will remain 100$ only. Total assets v will take at a conservative side. Though derivative trades are contingent liabilities but as we do liquidity mgmt more importantly forRead more
Leverage Ratio=total assets/equity
Here we have used 50$ from equity for cash margin but this will not change equity
So equity will remain 100$ only.
Total assets v will take at a conservative side. Though derivative trades are contingent liabilities but as we do liquidity mgmt more importantly for crises times so we need to take even contingent liab in its full value.
So total assets = 150$ (currency jo lena hi hai) + 200$ (cds sold- in the event of default whole has to be paid) + 50$ (Delta shares) + 50$ cash+ 50$ cash margin=500
Leverage ratio=500/100=5
See lessCounterparty credit risk
This is little unclear.. I think options are incorrect.. Option a should have been the answer. If value of security rises, seller of security or borrower of cash should be at loss because he would borrowed more money or sold less security for the same borrowed amount. On the other hand it's good forRead more
This is little unclear.. I think options are incorrect.. Option a should have been the answer.
If value of security rises, seller of security or borrower of cash should be at loss because he would borrowed more money or sold less security for the same borrowed amount.
On the other hand it’s good for security buyer as he is getting better collateral coverage I. E. Lower LTV
If value of security decreases , vice versa of the above explanation holds.
See lessPortfolio risk-analytical methods
See lessValue at risk
Value at risk
Value at risk
Bond yields
This is carry rolldown topic under bond yields topic and not p&l. Plz read the que carefully.
This is carry rolldown topic under bond yields topic and not p&l. Plz read the que carefully.
See lessBond yields
Not able to rotate
Not able to rotate
See lessBond yields
Answer is c.. but I just need to know the reason of a and b. Why in case of realised forwards, risk premium is not built in and in case unchanged term structure risk premium must be there.
Answer is c.. but I just need to know the reason of a and b. Why in case of realised forwards, risk premium is not built in and in case unchanged term structure risk premium must be there.
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