Ecobank holds ¢450million T-Bill but is in short of cash. It needs cash to meet the requirement of a customer who has come to withdraw ¢400million.You have been asked to approach Barclays Bank to sell the T-Bill for ¢395.5million on Monday morning with agreement to repurchase the bill on Friday evening. (a) How much in cedis does Ecobank lose in this transaction(b) What is the Repo Rate on this transaction?

The repo rate is the rate upon which commercial banks acquire money by selling their instruments to…

Answered: Ecobank holds ¢450million T-Bill but is…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ecobank holds ¢450million T-Bill but is in short of cash. It needs cash to meet the
requirement of a customer who has come to withdraw ¢400million.You have been
asked to approach Barclays Bank to sell the T-Bill for ¢395.5million on Monday
morning with agreement to repurchase the bill on Friday evening.

(a) How much in cedis does Ecobank lose in this transaction

(b) What is the Repo Rate on this transaction?

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