How much collateral does the dealer need

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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?

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