In class we discussed the case of FTX the cryptocurrency exchange.

In an essay response explain how poor short-term financial or liquidity management exacerbated FTXs decline. Note: your answer should be 3-5 paragraphs. Where any outside resources as used, they should be properly cited. Problem Solving: 10 marks.

You are an exporter in possession of Bankers Acceptance (B/A) with the following two choices: i) Hold the instrument until maturity and collect payment at that time; or ii) Discount the B/A with the importers bank and collect payment today. Furthermore, assume the face amount of the B/A is 10,000,000 USD, the acceptance commission is 2%, and the instruments time to maturity is 90 days. What discount rate would make the exporter indifferent between holding the B/A to maturity and discounting it with the importers bank? Are there any other factors you would consider?

Note: for calculation purposes you can assume a bankers year (360 days). Show and explain any intermediary calculations.

Also interpret and explain your conclusion intuitively. Hint: your final answer will involve a variable. However, afterwards, you may assume a reasonable value for that variable to write a numerical conclusion. Multiple Choice: 11 marks. Please place your answers for the below multiple-choice questions in the table below. No rough work will be marked.