CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

Slalom Brothers finances the purchase of $1,000,000 of a par value bond with a repurchase agreement. Bank of New York is the lending party in the repurchase agreement. Bank of New York agrees to purchase $1,000,000 par value of the bond at par from Slalom Brothers with a commitment to sell the same bonds back to Slalom Brothers two days later, for $1,000,250. What is the repurchase rate for this two-day loan?

A. 3.00%
B. 4.50%
C. 9.00%
Correct Answer: B

User Contributed Comments 7

User Comment
o123 2 days!!
thekapila I love this kinda financing...
chris12345 I love finance
Saxonomy Watch another bank by it from BNY on behalf of the brothers.
mfm102 PV = -1,000,000
FV = 1,000,250
N = 2
CPT I/Y = 0.012499 * 360 = 4.4997 % = 4.5 %
abs013 Why is it 360?
khalifa92 money market yield
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