Explanation:
20.1.2. A. True: `$490.00`
The bid–offer spread for the first holding is $0.030 * 10,000 = `; for the second holding, the bid-offer spread is $0.040 * 17,000 = `. Therefore, the cost to unwind the portfolio is (300.00 + 680.00)/2 = \`490.00`$.
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20.1.2. An investor holds two positions:
$10,000 where the proportional bid-offer spread is 0.030, and$17,000 where the proportional bid-offer spread is 0.040What is the approximate cost to the investor to unwind this two-position portfolio?
A
$490.00
B
$750.00
C
$980.00
D
$1,300.00
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