5. MONEY MARKET QUESTION - SHORT SALE AND REVERSE REPO (a) Suppose you sell $10M face of a T-bill maturing 17-Sep-2020 at 1.60% bank discount yield on trade day Friday 18-Oct-2019 (settles following business day). What price did you sell at? (nearest $0.01) (b) Suppose you buy the same $10M of T-bill back the following business day (trade 21- Oct-2019, for settle 22-Oct-2019) at a 1.70% discount yield. What price did you buy back at? (nearest $0.01) (c) In the above trade, you need to do a reverse repo to cover your short. For simplicity, assume that your haircut is 0%. Assume an overnight repo. Explain the dates and amounts (of bonds and cash) that will occur in your repo, assuming that the repo rate is 2.00%. Draw a diagram! (d) What is the total profit (on 22-Oct-2019) of the above transactions? (nearest $0.01) 5. MONEY MARKET QUESTION - SHORT SALE AND REVERSE REPO (a) Suppose you sell $10M face of a T-bill maturing 17-Sep-2020 at 1.60% bank discount yield on trade day Friday 18-Oct-2019 (settles following business day). What price did you sell at? (nearest $0.01) (b) Suppose you buy the same $10M of T-bill back the following business day (trade 21- Oct-2019, for settle 22-Oct-2019) at a 1.70% discount yield. What price did you buy back at? (nearest $0.01) (c) In the above trade, you need to do a reverse repo to cover your short. For simplicity, assume that your haircut is 0%. Assume an overnight repo. Explain the dates and amounts (of bonds and cash) that will occur in your repo, assuming that the repo rate is 2.00%. Draw a diagram! (d) What is the total profit (on 22-Oct-2019) of the above transactions? (nearest $0.01)