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1) Explain the mechanism of 'Banker Acceptance' through the means of an example. Explain it by supposing a scenario. 2) Calculate the Repo (Repurchase Agreement)

1) Explain the mechanism of 'Banker Acceptance' through the means of an example. Explain it by supposing a scenario.

2) Calculate the Repo (Repurchase Agreement) Interest Income by making up your own example and solve it through the formula given below. Again suppose a scenario when making up an example. (You can suppose your own values to solve the example)

FORMULA TO BE USED:

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- Please give an elaborative answer (min 60-70 words)

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Repo term in days RP Interest Income = Amount of Loan x Current Repo rate x 360 days Repo term in days RP Interest Income = Amount of Loan x Current Repo rate x 360 days

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