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Calculate the total cost of liquidation

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You are an equity trader in an over-leveraged hedge fund. Your manager urgently needs your analysis of the cost of liquidating a very large block of shares in Boeing with immediate effect. She wants a high level of certainty: 99% probability. Boeing is currently trading at $251.50 (bid), $251.40 (offer) and the position totals 900,000 shares. The mean of the stock spread is $2.20 and the standard deviation of the bid-offer spread is $5.50. Calculate the total cost of liquidation and explain your answer.

Reference no: EM132908366

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