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Homework 2: Trade Sizing Each guestion is independent. 1. You are the analyst at a $1.8 billion AUM fund. You want to buy the bonds

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Homework 2: Trade Sizing Each guestion is independent. 1. You are the analyst at a $1.8 billion AUM fund. You want to buy the bonds of Zeresh Tree Products (ZTP) at 75. Your downside scenario is a recovery of 50. Your PM has a hard rule of sizing positions to a max loss of 100bps (ignore coupons). a. What is your max position? b. What is this position as % of AUM

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