6. Your colleague Peter is evaluating whether touse marginal or incremental CVA. He makes thefollowingI. Incremental CVA depends on the order inwhich trades are executed but does not changedue to subsequent trades. It makes the mostsense when CVA needs to be charged toindividual traders and businesses.II. Marginal CVA does change when new tradesare executed. While it probably should not beused to price new transactions, it is good forpricing simultaneous transactions and todecompose a total CVA into its trade-levelcontributionsWhich of the above statements are (is) TRUE?a) Neitherb) l. onlyc) II. Onlyd) Both

Here discuss about the details of the uses of incremental CVA and marginal CVA for the trade and…

Answered: pricing simultaneous transactions and…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 16DQ

See similar textbooks

Similar questions

Which of the following is not a feature of a clearing house: A. It is used to reduce counter party risk B. It requires participants to put money into a margin account safe guarding both sides from loss C. Contracts are not standardized allowing for customized contracts D. Positions are marked to market on each trading day
Which of the following is NOT something that is needed for a market to be efficient? A. A large number of buyers and sellers. B. Information being released in a random fashion. C. No transactions costs. D. None of the above. (In other words, ALL of the above are necessary for a market to be efficient.)
Markets are efficient when prices adjust rapidly to new information, continuous markets exist, and large dollar trades can be absorbed without large price movements. True or False
[S1] Information traders can apply fundamental analysisto better assess the effect of the data gathered to thieinvestment prices. [S2] A good chartist does not need toapply fundamental analysis when deciding to acquireinvestments. a. Only S1 is true.b. Only S2 is true.c. Both are true.d. Both are false.
Which of the following statements is false? A. A short sale allows investors to generate additional profits from a decline in a security’s price. B. One of underlying assumptions of technical analysis is that supply and demand are driven by both rational andirrational investor behavior. C. Investors get a margin call if the equity in a margin account rises above the required maintenance level. D. Technical analysis cannot modify price manipulations.
Q.Which of the following is true for limit orders? a. They face adverse selection risk from noise traders b. They face adverse selection risk from informed traders c. They reduce market liquidity d. All of the above e. None of the above
A friend has asked you to explain the difference between a market order and a limit order. demonstrates your understanding of the differences between these two orders.
For technical analysis, based on patterns of historical prices, to have value, ______ form of market efficiency must be violated.
Which of the following(s) is (are) the characterization of dealer market? It improved market efficiency because dealers provide continuous bid and ask prices for securities. The dealer does not hold an inventory of securities. The presence a dealer market does not affect market efficiency because search costs are still high. It is time-consuming to search for a fair deal.
All of the following statements about an efficient market are correct EXCEPT: a. All financial transactions have an NPV of equal to zero b. A skilled individual may have sustainable above market returns c. The investor is compensated properly for risk borne d. The investor does not receive abnormal returns consistently
Which of the following change in regulations is most likely to improve internal market efficiency and thereby overall market efficiency? Reducing margin requirements on short selling. Raising margin requirements on short selling. Raising margin requirements on margin purchases. Reducing trading hours. Increasing margin interest rates.
market mispricing creates arbitrage opportunities, is this true and how. the actions of arbitrageurs contributes towards the removal of mispricing, is this true and how.

SEE MORE QUESTIONS

Recommended textbooks for you

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS

pricing simultaneous transactions and to decompose a total CVA into its trade-level contributions Which of the above statements are (is) TRUE? a) Neither b) l. only