- 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

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**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

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**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) |