Suppose you are a merger arbitrage trader, your desk has imposed a dollar return minimum such that you cannot invest in a deal unless you can potentially earn $200,000 per deal (assume no expectation of a higher counter offer arising prior to the deal closure). If there is 2.7% left in the spread if you invest in the deal today, what investment size (position size in dollars) must you put on at minimum to achieve this minimum per deal dollar return?



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