Question: Please explain.. Case study: https://pdfhost.io/v/bAO.kGaES_JPMorgan_the_London_Whale.pdf 1) How did JP Morgan find itself in this position? Develop a timeline of events from 2011 to the summer

Please explain..

Case study: https://pdfhost.io/v/bAO.kGaES_JPMorgan_the_London_Whale.pdf

1) How did JP Morgan find itself in this position? Develop a timeline of events from 2011 to the summer of 2012.

2) Consider standard market risk management practices for financial institutions, such as VAR:

  • a. Why was the risk management not sufficient to prevent such an extraordinary loss?
  • b. Which risk metric do you consider most appropriate? Should liquidity of an asset be considered as well?
  • c. Consider risk-weighted assets: should they include net exposure or gross exposure? Should derivatives of all types be regarded as the same type of RWA?

3) Is it appropriate to employ derivatives in a cash management function?

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