Suppose a bank enters a repurchase agreement in which it, Ask an Expert

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Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price of $29,950,000, with the promise to buy them back at a price of $30,000,000.

a. Calculate the yield on the repo if it has a 6-day maturity. (Use 360 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Yield on the repo % ?

b. Calculate the yield on the repo if it has a 18-day maturity. (Use 360 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Yield on the repo % ?

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Financial Management, Finance

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