What are the primary reasons for taking an initial margin in a classic repo?
Answer(s): C
What happens when a coupon is paid on bond collateral during the term of a classic repo?
A CD with a face value of EUR 10,000,000.00 and a coupon of 3% was issued at par for 182 days and is now trading at 3.10% with 120 days remaining to maturity. What has been the capital gain or loss since issue?
You have taken 3-month (92 days) deposits of CAD 12,000,000.00 at 1.10% and CAD 6,000,000.00 at 1.04%. Minutes later, you quote 3-month CAD 1.09-14% to another bank. The other dealer takes the CAD 18,000,000.00 at your quoted price. What is your profit or loss on this deal?
Answer(s): D
A 7% CD was issued at par, which you now purchase at 6.75%. You would expect to pay:
Answer(s): B
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