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Total Posts: 4
Joined: Aug 2018
Posted: 2018-09-24 06:50
Hello everyone, I have been lurking in the shadows for quite sometime and have finally decided to start participate in this great community.

TD have released their "TD Market Risk and Model development competition". Here is the project. Attached File: 2018-TD-MRMD-Case-Study (2) (1).pdf

One of the statements are: After determining the true risk-free, John was approached by the funding team; they wanted him to provide analyses of multiple hedging options for the bank's future funding requirement. The funding team determined that TD would soon be requiring USD $65B over the next eight months. They wanted John to determine what amount of the $65B funding requirement should be hedged and by which method; Futures, a Forward Rate Agreement, a Swap or any other feasible method.

What does it mean to "require" USD $65B?
Are they asking how can I hedge the currency risk (since TD is a Canadian Bank)? Or are they asking how can TD hedge their interest rate risk on the 65 B assuming they lock it in at the current LIBOR/OIS rate?
Lastly I am not to sure what a funding team is.

I am going to post my final paper and will keep you guys/gals posted if I win the competition (fingers crossed).

men lie, women lie, numbers don't


Total Posts: 43
Joined: Jun 2017
Posted: 2018-09-28 21:08
Not a rigorous definition, but an intuitive one: It means they need to buy a large amount of money using available short-dated instruments in a low-cost manner that simultaneously avoids dangerous, last-minute scrambling for cash. Thats sort of what a funding team does - ensure ongoing/future operations are funded “correctly”.
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