Question
Suppose BNP Paribas agrees to act as lender in a repurchase agreement with AQR Capital Management in which AQR plans to sell $800,000 of Illinois
Suppose BNP Paribas agrees to act as lender in a repurchase agreement with AQR Capital Management in which AQR plans to sell $800,000 of Illinois state bonds to BNP Paribas and buy them back 28-days later.BNP Paribas plans to charge AQR 3% interest and a 4%haircut.How much can AQR Capital Management borrow from BNP Paribas via the repurchase agreement?
Step by Step Solution
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Step: 1
In a repurchase agreement repo the borrower AQR Capital Management sells securities to the lender BN...
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Financial Institutions, Markets And Money
Authors: David S. Kidwell, David W. Blackwell, David A. Whidbee, Richard W. Sias
12th Edition
1119386489, 1119386483, 978-1-119-3303, 978-1119330363
