Suppose a dealer uses the repo market to earn a spread on a, Ask an Expert

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Suppose a dealer uses the repo market to earn a spread on a matched book. He feels rates will rise over the next 180 days. He borrows collateral one week at a time at 10.00% initially from a money market fund and then she lends the collateral to an S&L at 10.15% for the entire 180 days. How much does the dealer make or lose if rates do not rise?

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Financial Management, Finance

Category:- Financial Management
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