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Explanation:
The required collateral is calculated as: .
The new required collateral = .
The collateral deficit (amount to be called) = Required Collateral - Collateral Posted = $13,000,000 - 10,800,000 = 2,200,000$.
Because the collateral deficit (CNY 2,200,000) is less than the Minimum Transfer Amount (CNY 2,500,000), no additional collateral is called. Therefore, the hedge fund has to post CNY 0.
| Value (CNY) | |
|---|---|
| Mark-to-market value of net exposure | 25,000,000 |
| Mark-to-market value of collateral posted | 10,800,000 |
| Threshold amount | 14,000,000 |
| Minimum transfer amount | 2,500,000 |
| Rounding amount | 10,000 |
Assuming the net exposure increases to CNY 27,000,000 and the mark-to-market value of collateral posted has not changed, how much additional collateral will the hedge fund have to post?
A
CNY 0
B
CNY 1,990,000
C
CNY 2,000,000
D
CNY 2,500,000
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