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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

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?(4)What is the projected trading p/l and total return at the end of year 1 if the value of the 5-year note rises to 101?(5)What is the projected trading p/l and total return if the repo rate is 4.50% and the value of the 5-year note falls to 99?

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