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You own $1,000,000 in face value of bond that is currently priced at 99.50. The accrued interest per 100 of face value is 0.50. You would like to use this as collateral for a 5 day repurchase agreement. You are quoted a repo rate of 2% and a haircut of 0.25%. Calculate the amount you can borrow against this bond and the amount you wil pay back at the end of the repurchase agreement. Amount Borrowed = $1,000,000,00; Amount Paid Back = $1,020,000.00 Amount Borrowed = $997,500.00; Amount Paid Back = $1,000,000.00 Amount Borrowed = $997,500.00; Amount Paid Back = $997,777.08 Amount Borrowed = $995,000; Amount Paid Back = $995,276.39 %3D %3D %3D %3D

You own $1,000,000 in face value of bond that is currently priced at 99.50. The accrued interest per 100 of face value is 0.50. You would like to use this as collateral for a 5 day repurchase agreement. You are quoted a repo rate of 2% and a haircut of 0.25%. Calculate the amount you can borrow against this bond and the amount you wil pay back at the end of the repurchase agreement. Amount Borrowed = $1,000,000,00; Amount Paid Back = $1,020,000.00 Amount Borrowed = $997,500.00; Amount Paid Back = $1,000,000.00 Amount Borrowed = $997,500.00; Amount Paid Back = $997,777.08 Amount Borrowed = $995,000; Amount Paid Back = $995,276.39 %3D %3D %3D %3D

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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You own $1,000,000 in face value of bond that is currently priced at 99.50. The accrued interest per 100 of face value is 0.50. You would like to use this as collateral for a 5 day repurchase agreement. You are quoted a repo rate of 2% and a haircut of 0.25%. Calculate the amount you can borrow against this bond and the amount you wil pay back at the end of the repurchase agreement. Amount Borrowed = $1,000,000,00; Amount Paid Back = $1,020,000.00 Amount Borrowed = $997,500.00; Amount Paid Back = $1,000,000.00 Amount Borrowed = $997,500.00; Amount Paid Back = $997,777.08 Amount Borrowed = $995,000; Amount Paid Back = $995,276.39
Transcribed Image Text:You own $1,000,000 in face value of bond that is currently priced at 99.50. The accrued interest per 100 of face value is 0.50. You would like to use this as collateral for a 5 day repurchase agreement. You are quoted a repo rate of 2% and a haircut of 0.25%. Calculate the amount you can borrow against this bond and the amount you wil pay back at the end of the repurchase agreement. Amount Borrowed = $1,000,000,00; Amount Paid Back = $1,020,000.00 Amount Borrowed = $997,500.00; Amount Paid Back = $1,000,000.00 Amount Borrowed = $997,500.00; Amount Paid Back = $997,777.08 Amount Borrowed = $995,000; Amount Paid Back = $995,276.39
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