1a.

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1b.

Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury Securities trom a correspondent bank at a price of $24,995,000, with the promise to buy them back at a price of $25,000,000. a. Calculate the yield on the repo if it has a 7-day maturity. b. Calculate the yield on the repo if it has a 21-day maturity. (For all requirements, use 360 days in a year. Do not round intermediate calculations. Round your answers to 5 decimal places. (e.g., 32.16161)) a. Yield on the repo b. Yield on the repo 1% |