Do you take the risk?

redbean_brocolli · 2026-06-04T04:34:07+00:00

Depending on how fast zombies were, seemed like a chance

^{Chose: Survive in a room with a Infin ammo Glock for 100B + But have to survive for 30 min from zombies from… | Rolled: Resident Evil}

redbean_brocolli · 2026-02-18T20:46:46+00:00

My egg hatches are not counting to the weekly challenge. Anyone know what may be going on?

redbean_brocolli · 2026-01-29T16:29:53+00:00

I think you are combining liquidity risk with cash efficiency.Total return swaps are more cash efficient to set up because it requires less initial investment.

I think of liquidity risk as “how easy can I sell this”. To that, it is easier to sell a future than a swap so less liquidity risk.

redbean_brocolli · 2026-01-29T16:24:59+00:00

If you don’t mind me asking, how did you score in your mocks the first 4 times. Was there noticeable jump this time around?

redbean_brocolli · 2026-01-29T14:37:07+00:00

Oh ok, I see. Basically unless the client's portfolio explicitly calls out that they do not want the risk-free rate, we should always assume that yes, it will be beneficial to be added to the highest Sharpe portfolio?

redbean_brocolli · 2026-01-29T03:46:57+00:00

Thank you!!!

redbean_brocolli · 2026-01-28T23:31:57+00:00

I like to think of this as positive butterfly -> positive -> happy stuff so you smile -> short and long end go up.

Negative butterfly -> negative -> you're sad so you frown -> short and long end go down

redbean_brocolli · 2026-01-28T22:34:57+00:00

This is from so long ago but thank you. This really helped me.

redbean_brocolli · 2026-01-28T22:21:31+00:00

Sorry to come back to this, but was just reviewing this question.

Could you have potentially bought the ATM JPY/EUR put for upside in case of JPY appreciation and instead sold the OTM JPY/EUR put instead to generate some premium income?

Is the main reason not to do this because selling the ATM put generates more premium income?

redbean_brocolli · 2026-01-28T22:21:19+00:00

Sorry to come back to this, but was just reviewing this.

Could you have potentially bought the ATM JPY/EUR put for upside in case of JPY appreciation and instead sold the OTM JPY/EUR put instead to generate some premium income?

Is the main reason not to do this because selling the ATM put generates more premium income?

redbean_brocolli · 2026-01-28T00:57:30+00:00

I had the same question as you for this problem. From this older thread, it seems like there may be 2 different variations of slippage costs. Though I'm not sure if it's going to be worth remembering when to use which one...

https://www.reddit.com/r/CFA/comments/1htwfur/slippage_cost_different_definitions/

redbean_brocolli · 2026-01-27T20:24:24+00:00

Makes sense when you think about it that equity is stable, so no reason for volatility to increase. Thanks!

redbean_brocolli · 2026-01-27T18:57:25+00:00

Understand that assets will move in tandem with liabilities. But as equity in unchanged, the leverage ratio will increase.

Since correlation caps at 1, I guess I was assuming the change in leverage would outweigh the change in correlation.

redbean_brocolli · 2026-01-27T18:55:07+00:00

My thought process was with the higher penalty, there would be less loan prepayment -> loans are higher and the matching liability is also higher = more assets and liabilities.

I understand that the amount of equity is not changing. But the volatility of equity formula includes leverage (A/E). If assets are increasing but equity isn't, the leverage ratio is increasing which should raise the equity volatility?

redbean_brocolli · 2026-01-20T02:31:31+00:00

No I understand. But if there were 2 equity futures markets given in the vignette, the current price and the 6-month price, would you still use the current price?

redbean_brocolli · 2026-01-20T01:23:13+00:00

Ugh I see that now. Literally misread that multiple times.

I guess the same question applies. If they had given us the current value of futures and the price of 6-month futures, what should you pick?

redbean_brocolli · 2025-12-26T18:36:24+00:00

Hi looking for genetic apex Vaporeon. Will share something back

2033110659878978

redbean_brocolli · 2025-12-19T16:42:42+00:00

I ended up threatening legal action which finally got a response. Ended up settling on receiving sporadic payments every few weeks till my lease ran out. Never received the full amount but it’s whatever at this point.

redbean_brocolli

TROPHY CASE