- CFA Exams
- CFA Level I Exam
- Study Session 14. Fixed Income (1)
- Reading 43. Fixed-Income Markets: Issuance, Trading, and Funding
- Subject 5. Short-Term Funding Alternatives Available to Banks
CFA Practice Question
A two-day loan for which $1,000,000 par value of a bond is sold to the lender at par has a repurchase rate of 3.60%. What is the repurchase price?
A. $1,000,180
B. $1,000,200
C. $1,000,360
Explanation: Repurchase price = original price x (rate x (m/360)+1) = $1,000,200
User Contributed Comments 3
User | Comment |
---|---|
myanmar | 1,000,000*(3.6%*(2/360)+1)=1,000,000*1,0002=1,000,200 |
arendb | HP 12C: PV = -1,000,000 n = 2 i = (3.6/365) FV = Calc |
sierrablue | correction for n ->i=(3.6/360) |