Northshore Securities buys 100,000 par of a Prairie Grid Energy bond from one client at 98.50 and sells it to another client from inventory at 98.90. Separately, it executes a 10,000 share purchase for a client at a 1 % commission. Fill the two cells: the principal profit on the bond, and the agency commission on the shares, in dollars.
Northshore Securities buys 100,000 par of a Prairie Grid Energy bond from one client at 98.50 and sells it to another client from inventory at 98.90. Separately, it executes a 10,000 share purchase for a client at a 1 % commission. Fill the two cells: the principal profit on the bond, and the agency commission on the shares, in dollars.
Answer
Principal profit → 400 · Agency commission → 100
Cells - Principal profit · ±0.01 · unit $ - Agency commission · ±0.01 · unit $ Bond prices are per 100 of par: `=(98.90-98.50)/100*100000` = 400 — the spread earned as principal. Commission: `=0.01*10000` = 100 — earned as agent, with no price risk.
NI 31-103 s. 7.1(2)(a) (investment dealer = dealer or underwriter); OpenStax, Introduction to Business (CC BY 4.0) §16.6–16.7 — shapes only