Quote:
Originally Posted by Jason14h
They “love” it in the sense they can (usually) get a better guaranteed ROI for the funds they segregate then the CBA real time value rate , so they can put less real money into segregation to meet their future obligations then paying cash today .
Small % (if even a %) but it’s “free” money for an owner in the long run
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It would be out of their hands, and held in Trust by a law firm - there would be no ability to outperform the discount rate.
But even if they could, for the sake of argument, it is pointless and not worth their efforts. Even if they could arb 2% per year on this deal (and they can't), that's a whopping $180k/yr before fees and before taxes.
Organizational payroll is well over $100M/yr
So no, I doubt they "love" it.