a]
Yield = ((repurchase price - purchase price) / purchase price ) * (360 / t), where t = days to maturity.
Yield = (($30,000,000 - $29,950,000) / $29,950,000) * (360 / 6)
Yield = 0.1001670, or 10.01670%.
b]
Yield = ((repurchase price - purchase price) / purchase price ) * (360 / t), where t = days to maturity.
Yield = (($30,000,000 - $29,950,000) / $29,950,000) * (360 / 18)
Yield = 0.0333890, or 3.33890%.
Suppose a bank enters a repurchase agreement in which it agrees to buy a treasury securities...
Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price of $22,950,000, with the promise to buy them back at a price of $23,000,000. a. Calculate the yield on the repo if it has a 5-day maturity. b. Calculate the yield on the repo if it has a 16-day maturity. (For all requirements, use 360 days in a year. Do not round intermediate calculations. Round your answers to...
Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price of $23,950,000, with the promise to buy them back at a price of $24,000,000. a. Calculate the yield on the repo if it has a 6-day maturity. b. Calculate the yield on the repo if it has a 20-day maturity. (For all requirements, use 360 days in a year. Do not round intermediate calculations. Round your answers to...
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. 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.
Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price of $410 million, with the promise to sell them back at a price of $410.1 million in five days. Calculate the quoted and bond equivalent yield. What is the actual yield if you consider reinvestment and compounding?
Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price of $410 million, with the promise to sell them back at a price of $410.1 million in five days. Calculate the quoted and bond equivalent yield. What is the actual yield if you consider reinvestment and compounding?
A bank enters into a repurchase agreement in which it agrees to sell Treasury securities to another bank at a price of $24,973,557, with a promise to buy them back at a price of $25,000,000 in 8 days. Repo yields are expressed as “single payment yields.” What is the single payment yield on this repo? Answer in percent to three decimal places. Omit the percent sign.
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Suppose Salami Brothers engages in a repo with a bank. In the agreement, Salami Brothers sells $9 987 950 worth of money-market securities to the bank and agrees to repurchase the securities in 30 days for $10 000 000. (20 Marks). (a) Is this transaction a loan, and if so, who is the borrower and who is the lender? Defend your answer. (). (b) Is the loan collateralised? What is the collateral? Who holds the collateral during the term of...