(Answered) Question a treasurer in europe would like to borrow usd for

Finance

Question: A treasurer in Europe would like to borrow USD for 3 months. But instead of an outright loan, the treasurer decides to use the repo market. The company has holdings of EUR40 million bonds. The treasurer uses a cross-currency repo. The details of the transaction are as follows:

• Clean price of the bonds: 97.00

• Term: September 1 to December 1

• Last coupon date on the bond: August 12

• Bond coupon 4% item EUR/USD exchange rate: 1.1150

• 3-month USD repo rate: 3%

• Haircut: 3%

a. What is the invoice price (dirty price) of the bond in question?

b. Should the repo be done on the dirty price or the clean price?

c. How much in dollars is received on September 1?

d. How much repo interest is paid on December 1?

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92505680
Price:- $15

Verified Expert

Priced at $30 Now at $15, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Basic Finance

How does the lack of liquidity affect your execution

How does the lack of liquidity affect your execution strategy? Does this affect your use of limit orders and market orders? (Please attach any known literature if possible so i can refer to it. If not, its fine!)

Noel and noelle are thriving young professionals noel earns

Noel and Noelle are thriving young professionals. Noel earns $75,000 as a financial planner and Noelle earns $85,000 as an occupational therapist. They have no children. Both Noel and Noelle are covered by an employer sp ...

What are the top 5 dos and donts regarding e-portfolio each

What are the top 5 "do's and don't's regarding e-portfolio? each one of your 5 do's and don't's from your perspective and how it affected your authoring your e-portfolio content and construction. i need some help I;m doi ...

Why would a person research the effects of global

Why would a person research the Effects of global competitiveness on strategic human resources?

Cowcor copr currently has 76 million in debt outstanding

COWCOR COPR currently has $76 million in debt outstanding with a 6% interest rate. The terms of the loan require it to repay $19 million of the balance each year. Suppose the marginal corporate rate is 40% and that the i ...

A bank makes a loan on 01012010 with the following

A bank makes a loan on 01/01/2010 with the following payments: 06/30/2010 - $2,300,000 12/31/2010 - $1,300,000 06/30/2011 - $5,700,000 12/31/2011 - $3,400,000 06/30/2012 - $360,000 12/31/2012 - $560,000 At an annual rate ...

Really struggling with this question any help and insight

Really struggling with this question. Any help and insight is greatly appreciated. The current price of a 10-year, $1,000 par value bond is $1,158.91. Interest on this bond is paid every six months, and the simple annual ...

Gardial amp son has an roa of 12 a 5 profit margin and a

Gardial & Son has an ROA of 12%, a 5% profit margin, and a return on equity equal to 20%. What is the company's total assets turnover? What is the firm's equity multiplier?

Discuss the core business objectives and the primary focus

Discuss the core business objectives and the primary focus of the financial business model.

Old xyz corp has total assets of 1000000 and a debt ratio

Old XYZ Corp has total assets of $1,000,000 and a debt ratio of 30%. Currently it has sales of $2,500,000, total fixed costs of $1,000,000, and EBIT of $50,000. If XYZ pays 6% interest on debt, what is XYZ's ROE?

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert