Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please help me for my homework! Be careful when solving problems. I really need the right answers 1- You enter into a reverse repo transaction
Please help me for my homework! Be careful when solving problems. I really need the right answers
1- You enter into a "reverse repo" transaction meaning that the counterparty delivers some securities (let's say t-bonds) to you and borrows from you. According to the agreement, you lend 25.000 $ for 20 days with an annual repo yield of 8%. However, suppose that you immediately needed urgent liquidity. You decided to enter into a "repo" transaction now with another party by using the t-bonds of the reverse repo counterparty. This new agreement allows you to borrow 20.000 $ for 8 days with an annual repo yield of 6%. What would be the total profit at the maturity of the "repo" transaction? (1 year = 360 days) a) 84,44 $ b) 26,67 $ C) 17,78 $ d) 44,44 $ 2- Suppose that you have three pension plans that you make periodic payments for each. First plan provides a monthly rate of return of 1% (monthly payments). Second plan provides a semiannual rate of return of 5% (semi-annual payments). Third plan provides a quarterly rate of return of 3% (quarterly payments). You invest 100 $ for each plan in accordance with their periodic payment periods for 10 years. What would be your total amount of funds at the end? a) 23.003,87 $ b) 33.850,59 $ c) 11.176,76 $ d) 19.814.10 $Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started