Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are a bond dealer who is borrowing money (=lending a bond) via reverse repo, starting from Thursday Oct 28, 2021 for a term of

image text in transcribed

You are a bond dealer who is borrowing money (=lending a bond) via reverse repo, starting from Thursday Oct 28, 2021 for a term of one business day (i.e. until Fri Oct 29, 2021). The face value of the bond is $10M, the dirty price is 104% of face, the haircut is 2%. Since the bond is "special",the repo rate is actually negative, in this case -5%. How much will you pay back on Oct 29, 2021? (nearest $0.01). (M = millions)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance For Freelancers Financial Intelligence

Authors: Andrew Holmes

1st Edition

1408101165, 978-1408101162

More Books

Students also viewed these Finance questions

Question

1. Identify three approaches to culture.

Answered: 1 week ago

Question

2. Define communication.

Answered: 1 week ago

Question

4. Describe how cultural values influence communication.

Answered: 1 week ago