- Using the framework in Table 1.1, explain what types of arbitrage are presented by the following scenarios:
- A holder of metal inventory sells inventory in the spot market and goes long a future contract that is at an extreme contango.
- A bond dealer trades a negative net basis in bond future contract.
- A high frequency trader purchases a stock on one electronic trading venue and hits a bid on another exchange simultaneously.
- A Hungarian homebuyer takes out a mortgage denominated in Swiss francs.
- Bonus points: What is the name of the equivalent hedge fund trade to (d) above?
Consider this merger announcement and review the recent trading activity.
- Estimate a closing date.
- Estimate a downside.
- Calculate a spread.
- Annualize the spread.
Item 1.01. Entry into a Material Definitive Agreement.
Business Combination Agreement and Plan of Merger
- On August 10, 2015, Terex Corporation (“Terex” or the “Company”) entered into a Business Combination Agreement and Plan of Merger (the “BCA”) with Konecranes Plc, a Finnish public company limited by shares (“Konecranes”), Konecranes, Inc., a Texas corporation and an indirect wholly owned subsidiary of Konecranes (“Kone, Inc.”), Konecranes Acquisition Company LLC, a Delaware limited liability company and a newly formed, wholly owned subsidiary of Kone, Inc. (“Merger Sub”). The combined company that will result from the transaction will be called Konecranes Terex Plc.
- Pursuant to the BCA, Terex shareholders ...