How much collateral does the dealer need

Assignment Help Financial Management

Reference no: EM131878336

A dealer needs to borrow USD 50 million. He uses a Treasury Bond as collateral. The Bond has the following characteristics:

• Collateral 4.3% Treasury Bond, June 12, 2004 • Price: 100.50 • Start date: September 10 • Term: 7 days • Repo rate: 2.7% • Haircut: 0%

(a) How much collateral does the dealer need?

(b) Two days after the start of the repo, the value of the Bund increases to 101. How much of the securities will be transferred to whom?

Reference no: EM131878336

Questions Cloud

About the industrial production rate and the inflation rate : what will be your expected rate of return on the stock, given the new information about the industrial production rate and the inflation rate?

Interest rate that both earnings are worth the same : Is there an interest rate that both earnings are worth the same?

Prepare cash budget for the period : Prepare cash budget for the period from january to march 2018.

The expected rate of return on the market portfolio : Assume the risk-free rate is 5% and the expected rate of return on the market portfolio is 14%.

How much collateral does the dealer need : How much collateral does the dealer need? What repo interest will be paid?

Exclusion for cancellation of debt on personal residence : Fran qualifies for exclusion for cancellation of debt on a personal residence.

How much interest will be paid at the end of the repo deal : How much cash does the dealer receive? How much interest will be paid at the end of the repo deal?

What is the afn needed to fund : Using the additional funds needed formula what is the AFN needed to fund the 2017 growth for Trump.

Expected dividends model as the basis for the stock value : Calculate a value for any stock. If the stock pays a dividend, use the expected dividends model as the basis for the stock value.

User Account

All Pages