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You are considering buying a Repurchase Agreement (i.e., taking a purchase repo position). You uncover the following information about the instrument. Par = $1,000,000 Maturity
You are considering buying a Repurchase Agreement (i.e., taking a purchase repo position). You uncover the following information about the instrument. Par = $1,000,000 Maturity = 9 days Current Price = $987, 025 What is the Repo's yield? [Show all calculations. Take your answer to 4 places. Circle your answer.] What is repo's bond equivalent yield BEY)? (Show all calculations. Take your answer out to 4 decimal places. Circle your answer.] Based strictly upon your calculations above, if a certain T-Bill has a discount yield of 9.53% and a bond equivalent yield (BEY) of 9.82%, OUR instrument (the T-Bill or Repo) would you choose
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