5 year note price is 100 at a yield of 3.0% (coupon rate paid at the year end);

1 year repo rate on a 5 year note is 2.5%;

Buy 100 million of 5 year notes;

Finance 98% on Repo.

(1)

What is the

margin requirement?

(2)

What is the leverage ratio?

(3)

What is the projected financing cash flow per year?