Suppose a manager wants to borrow $50 mil lion of a Treasury security that it plans to
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Suppose a manager wants to borrow $50 mil lion of a Treasury security that it plans to pur- chase and hold for 20 days. The manager can enter into a repo agreement with a dealer firm that would provide financing at a 4.2% repo rate and a 2% margin requirement. What is the dollar interest cost that the man- ager will have to pay for the borrowed funds?
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