Workplace reviews and discussion: 元大金融控股股份有限公司(元大金控) (元大證券) (元大銀行)

It happens every day! The results from the previous batch of experiments still aren’t out, and the daily CD deliveries have turned my hair gray. Every day I look for people, but I can’t find anyone. This is the kind of problem that actually feels meaningful

“Determining the Extreme Value of the Cross-Period Net Economic Utility at Year-End Settlement Including Cookie Consumption”

During the year-end settlement in 2024, an investor used the following criteria as the evaluation standard:

Year-end settlement objective function =

Financial book profit and loss

Foreign exchange effects

− Present value of life-event expenditures

− Monetary equivalent of utility losses

± Marginal utility adjustment for cookie consumption

I. Financial Positions (Full Calculation Required)

(I) Futures

The investor holds 2 long Taiwan Stock Index futures contracts

Contract multiplier: 200

Opening index: 15,750

Year-end settlement index: 16,180

Margin as a percentage of notional value: 12%

Annualized funding cost: 3.5%

The opportunity cost of margin is calculated using continuous compounding

(II) Warrants (Underlying Asset Without Dividends)

European call warrant

Current underlying price: 102

Strike price: 100

Time to expiration: 1 year

No dividends

Risk-free interest rate: 2% (continuously compounded)

Volatility: 28%

Recognized at the Black–Scholes theoretical price at year-end

The number of warrants is allocated such that Delta is not 0 (not Delta-neutral)

(III) Currency Position

At the beginning of the year, 120,000 USD was exchanged at 29.8 TWD/USD

Year-end exchange rate: 31.4

No interest accrued throughout the year

Foreign exchange profit or loss must be adjusted for an inflation rate of 1.5%

II. Life Events (Included in the Year-End Settlement After Discounting)

(I) Marriage

Married in the middle of the year

One-time expenditure: 1,350,000 TWD

Psychological discount rate: 3%

(II) Having a Child

Child born at year-end

Expected expenditure period: 22 years

Annual real expenditure: 320,000 TWD

Expenditure growth rate: 1%

Discount rate: 2%

(III) Loss of Life Utility

Caused by investment and work-related stress:

Sleep deprivation, utility loss equivalent to 90,000 TWD

Fewer movie outings, utility loss of 45,000 TWD

Fewer all-you-can-eat meals, utility loss of 35,000 TWD

III. Cookies (Core Difficulty)

The investor consumed a total of 480 cookies during the year

Price per cookie: 35 TWD

Cookies are a form of immediate-pleasure consumption

The marginal utility function of cookies is:

Marginal utility = 1200 / square root of n

where n is the cumulative number of cookies already consumed

When marginal utility is less than 35, that portion of consumption is considered overconsumption

The utility corresponding to overconsumption must be included

The utility loss multiplied by a penalty coefficient of 0.6 serves as the year-end settlement adjustment

IV. Question

After fully incorporating all financial profits and losses, foreign exchange adjustments, the present value of life events, utility losses, and the marginal utility adjustment for cookie consumption, which of the following is the closest estimate of the investor’s “adjusted net economic effect after year-end settlement” for 2024?

Options (only one is correct)

A. Positive 2,800,000 TWD

Financial operations were highly successful, and cookie consumption remained within the rational range

B. Positive 1,050,000 TWD

Financial gains were substantial, but having a child and cookie consumption significantly eroded the result

C. Negative 650,000 TWD

There was a book profit, but the year-end settlement showed a substantive loss

D. Negative 2,300,000 TWD

Highly leveraged financial operations, long-term life expenditures, and cookie overconsumption caused the overall economic situation to deteriorate