Assume that you made a repo transaction in which you sold securities for 50 million TL and will buy the securities back for 50,025,000 one day later. What is the repo rate to you? Why would you do such transaction?
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- An investment bank sells securities under a repurchase agreement for $800.438 million and buys them back in 7 days for $800.568 million. What is the repo's single payment yield?Report your answer in % to the nearest 0.01%;What is the effective, compound rate of interest you earn if enter into a repurchase agreement in which you buy a tresaury bill for $76,789 and agree to sell it after a month (30 days ) for $77,345? what is the compound rate of interest you pay if you sell a tresaury bill for $76,789 and repurchase it after 30 days for $77,345?Suppose a comp sale occurred at a transaction price of $500,000, and was financed by the seller with a $400,000 note, for 15 years at 3%. The market rate of interest at the time of the sale was five percent, what is the value of the favorable finance?
- An investor starts with 1 million and converts them to £694,500, which is then invested for one year. In a year the investor has £736,170 which she then converts back to euros at an exchange rate of 0.68 pounds per euro. What way the annual euro rate of return earned?A company is proposing to issue a 5-year debenture of Rs.1000 redeemable in equal instalments at 14% rate of interest per annum. If an investor has a minimum required rate of return of 12%, calculate the debentures present value for him. What should he be willing to pay now to purchase the debenture?Suppose a bank enters a repurchase agreerment in which it agrees to sell Treasury securities to a correspondent bank at a price of $9.99,838 with the promise to buy them back at a price of $10.000,073. Calculate the yield on the repo if it has a 6-day maturity. (write your answer in percentage and round it to 2 decimal places)
- A security dealer plans to purchase $100 million of T-notes at the next auction. The dealer anticipates holding the securities one day and plans to finance the purchase with an overnight repurchase agreement. Currently overnight repo rates are at 3%. Explain how the repurchase agreement would work in this case? Determine the dollar interest, selling price, and repurchase price on the repurchase agreement? What type of repurchase agreement would the dealer need if there was a possibility that it could take several days to sell the securities?A. Nii Laryea purchased a T-bill with a GHC10,000 par value for GHC9,465. One hundred days later, Nii sells the t-bill for GHC9,650. Assuming 365 days in a year, what is Nii Laryea’s expected annualized yield from the transaction? B. Assume investors require a 5% annualized return on a six-month t-bill with a par value of GHC10,000. The price investors would be willing to pay in cedis will be?Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price of $25,950,000, with the promise to buy them back at a price of $26,000,000. a. Calculate the yield on the repo if it has a 5-day maturity. b. Calculate the yield on the repo if it has a 15-day maturit
- Assume it is now January 1, 2000, and someone offers the following deal: starting from year 2000, you will be paid each year the amount of dollars equal to the year, i.e., $2000, $2001, $2002, .... until year 3000 inclusive. If payments occur at the year end and the interest rate remains at 10%, what is the PV of such a deal? What is the PV if the payments covers only the years from 2000 to 2050 inclusive? What can you conclude for the comparisoncompany will receive €75 million in 1 year from an Italian customer. observe the following data. $:€ Spot Rate $1.25:€1.00 $:€ Forward Rate $1.30:€1.00 How many USD will you receive if you employ a forward hedgeSuppose you are a euro-based investor who just sold Amazon.com Inc. shares that you hadbought six months ago. You had invested 10,000 euros to buy Amazon shares for $120 pershare; the exchange rate was $1.15 per euro. You sold the stock for $135 per share and convertedthe dollar proceeds into euro at the exchange rate of $1.06 per euro. a) Determine the profit from this investment in euro terms.b) Compute the rate of return on your investment in euro terms.c) How much of the return is due to the exchange rate movement?