i need the answer quickly QUESTION 2 (Suppose that a trader has bought two shares AB and CD. In particular, she has x(£000s) shares of AB and double the amount of shares of CD. The share's AB currentbid and offer are £115.5 and £115.6 respectively while the share's CD current bid andoffer are £95 and £98 respectively.I.a) Which of the two shares (AB and CD) is more liquid. Explainb) Calculate (in terms of x) the cost of liquidation in a normal marketII.Consider a bank's portfolio of options on GBP (£):PositionDeltaGammaVegaOption 1Option 2Option 3-1050-2,0000.82.41.6-0.41.20.98000.51.61.4a) Calculate the Delta (A), Gamma (r) and Vega (V) of the portfoliob) Explain how the Portfolio's Delta, Gamma and Vega can be interpretedAssume a fourth traded option (option 4) is available. Option's 4 Delta (A), Gamma(r) and Vega (V) are given in the following table:DeltaGammaVegaOption 42.50.5Identify a position in the traded option 4 and in GBP to make the portfolio bothgamma and delta neutrald) Identify a position in the traded option 4 and in GBP to make the portfolio both vegaand delta neutral[s.,e) Assume another option (option 5) that can be traded, is available. Option's 5 Delta(A), Gamma (r) and Vega (V) are given in the following table:DeltaGammaVegaOption 50.90.31.2Identify a position to make the portfolio delta, gamma and vega neutral

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Suppose that a trader has bought two shares AB and CD. In particular, she has x (£000s) shares of AB and double the amount of shares of CD. The share's AB current bid and offer are £115.5 and £115.6 respectively while the share's CD current bid and offer are £95 and £98 respectively. I. a) Which of the two shares (AB and CD) is more liquid. Explain b) Calculate (in terms of x) the cost of liquidation in a normal market

Suppose that a trader has bought two shares AB and CD. In particular, she has x (£000s) shares of AB and double the amount of shares of CD. The share's AB current bid and offer are £115.5 and £115.6 respectively while the share's CD current bid and offer are £95 and £98 respectively. I. a) Which of the two shares (AB and CD) is more liquid. Explain b) Calculate (in terms of x) the cost of liquidation in a normal market

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter14: Security Structures And Determining Enterprise Values

Section: Chapter Questions

Problem 1EP

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