CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

Slalom Brothers finances the purchase of $125,000,000 par value of a bond with a repurchase agreement. Bank of New York is the lending party in the repurchase agreement. Bank of New York agrees to purchase $125,000,000 par value of the bond at $124,531,250 from Slalom Brothers with a commitment to sell the same bonds back to Slalom Brothers for $124,545,952 one day later. What is the repurchase rate for this one-day loan?
A. 3.00%
B. 3.75%
C. 4.25%
Explanation:

User Contributed Comments 5

User Comment
aakash1108 ....nice one. We need to buckle up on these tiny equations here and there.
mazurin You can easily calculate this using TI calculator: Enter PV, FV, PMT=0, N=1 then compute I/Y times 360
azramirza Thanks Mazurin...
cslau83 why use 360 days?
arendb Bank Discount Yield or Money Market Yield uses the 360 day convention...
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