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Repurchase agreements questions

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Repurchase agreements Questions

Suppose a manager wants to borrow $50 million of a Treasury security that it plans to purchase and hold for 20 days. The manager can enter into a reverse repo agreement with a dealer firm that would provide financing at a 4.2% repo rate. What is the dollar interest cost that the manager will have to pay for the borrowed funds?

Reference no: EM133058499

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