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Q1 (a ) Briefly explain how the dealer bank can rollover (i.e renew) the overnight repo agreement and finance the bonds using borrowed money for

Q1 (a ) Briefly explain how the dealer bank can rollover (i.e renew) the overnight repo agreement and finance the bonds using borrowed money for a year. Why might this be a profitable action for the dealer bank?

(b ) Outline one risk the dealer bank faces by adopting this rollover strategy to finance its bond purchase

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