A financial insitution buys 7 million shares in a company and 35 million ounces of a commodity. The bid-offer spread on the shares is 69.5 - 70.5 Dollars. The bid offer spread on the commodity is 25 - 25.5 Dollars. Calculate the cost of liquidation of this position in a normal market.

Moreover, Explain how is the cost of liquidation in a stressed market calculated.

Answer rating: 100% (QA)

To calculate the cost of liquidation in a normal market we need to consider both the bidoffer spread... View the full answer