p2 first bullet "The names shareholder wealth maximization
(SWM) ..."
p7 third bullet point "If a bank posts these quotes, what is
the ASK price for the USD ..."
p7 fourth bullet point "If a bank posts these quotes, what is
the ASK price for the GBP ..."
p17 fifth bullet point "Overall balance" is curent A/C + finanical A/C
+capital A/C -L41 U.S official reserve assets, net (Gold, SDR, IMF Reserve, FX)
plus statistical discrepancy.
L2 Errata/Addenda
p19 second to last bullet "do not make wholesale markets"
I am still thinking about the "price risk" explanation I gave to accompany the last
bullet on p20. Certainly the fact that inventory risk (driven by FX price risk
and interest rate risk) exists partly explains why there is a spread
in the first place, but I have not finished reasoning as to why it magnifies
spreads going forward. I still think that the interest rate risk has a
stronger effect on inventory price risk the further forward you look, but
I have not confirmed that. It is certainly true that liquidity risk
(coupled with FX price risk and interest rate risk) must widen spreads
looking forward.
p26 second bullet CP (Commercial Paper is not secured)
p27 second to last bullet should read
NZD500,000=[1+ 5.8350/100 . 92/360] = NZD 507,455.83
L3 Errata/Addenda
p55 Last bullet point. "...example from L2 Section 5.4: June 9th..."
p56 Last bullet point. "...Similarly, if you borrow domestically and invest it abroad you are..."
p57 Strike out Footnote 2. It's too loose.
p60, both equations with "1=()xX+()x5," should have
V in the numerator, not C:
1=(V_CO/(V_CO+V_PO))xX+(V_PO/(V_CO+V_PO))x5
