Question 10: Due to the naturally unreliable tax receipts, The State of Wakanda has $200M of excess cash. The state will not require these funds for the next 25 days, at which time the company will use the cash to make interest payments. In the meantime, the state wishes to invest these monies in a repo (or reverse repo) agreement to earn some money while holding this cash. Consultants and brokers working for the state have found a primary dealer who is willing to enter into this agreement. The terms of the deal are as follows: The state will lend the primary dealer $200M. In exchange, the state will receive T-Bills with a market value of $213M from the primary dealer as collateral. In 25 days, the state will return the collateral (the t-bills), and the primary dealer will pay the state $200.25M, representing the original monies leant of $200M and interest of $250K. a) What is the "haircut measured as a percentage of market value of the collateral? b) What is the ANNUAL repo rate the State of Wakanda earns? (Hint, if you don't know the basis convention for annualizing a repo rate, you may need to research how to calculate.)