(Answered) Question a dealer wants to borrow 10 million using a bond

Finance

Question: A dealer wants to borrow $10 million using a bond repo but due to certain market restriction he cannot repo out the bond for 2 months.

a. Suggest a strategy so that he can borrow the cash for the period without losing the permanent ownership of the bond.

b. Calculate the forward price of bond trading at $43.59 if the current repo rate is 4% p.a.

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