Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price of $$24,995,000,$ with the promise to buy them back at a price of $$25,000,000.($LG $5-2)$

a$.$ Calculate the yield on the repo if it has a $7-$day maturity.

b$.$ Calculate the yield on the repo if it has a $21-$day maturity.

Calculate the bond equivalent yields and the equivalent annual returns for the repurchase agreements described in Problem $14.($LG $5-2)$