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Can you write it down on paper instead of doing it in excel? Suppose that an investor purchases $3 million market value of a bond.

Can you write it down on paper instead of doing it in excel?

Suppose that an investor purchases $3 million market value of a bond. The investor decides to borrow the funds via a repurchase agreement and the dealer is willing to lend 97% of the market value of the bond. The overnight repo rate is 7%. Assume that the investor borrows the funds for 1 day. What is the dollar interest cost of this borrowing arrangement? Explain the process.

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