the liquidity requi s March. Assume legal reserve requirements are 5%. Currently the bank's total deposits are sooo million and are expe The bank has estimated that 20% of the total deposits are hot mc rest are stable (core) deposits. The liquidity manager would like to keep a liquidity reserve of 8o9 deposits and 10% Tiquidity reserve for core deposits Currently the banks total loans are at 4000 million. The bank expec March.
Macrohedging
Hedging or hedge accounting is a risk-mitigation technique used to protect the current financial position from potential losses. Hedging is often confused with speculating. The major difference between the two is that hedging does not involve guessing, whereas speculation is based on guessing the direction of movement of the underlying asset to book profits.
Finance Mathematics
The area of applied mathematics known as mathematical finance, also known as quantitative finance or financial mathematics is concerned with the mathematical modeling of financial markets. The application of mathematical methods to financial problems is known as financial mathematics. A financial market is a place where people can exchange low-cost financial securities and derivatives. Stocks and bonds, raw materials, and precious metals, both of which are regarded as commodities in the stock markets, are examples of securities. It uses probability, statistics, stochastic processes, and economic theory as methods.
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