User Account

All Pages

Should repo be done on the dirty price or the clean price

Assignment Help Finance Basics
Reference no: EM131696983

Question: A treasurer in Europe would like to borrow USD for 3 months. But instead of an outright loan, the treasurer decides to use the repo market. The company has holdings of EUR40 million bonds. The treasurer uses a cross-currency repo. The details of the transaction are as follows:

• Clean price of the bonds: 97.00

• Term: September 1 to December 1

• Last coupon date on the bond: August 12

• Bond coupon 4% item EUR/USD exchange rate: 1.1150

• 3-month USD repo rate: 3%

• Haircut: 3%

a. What is the invoice price (dirty price) of the bond in question?

b. Should the repo be done on the dirty price or the clean price?

c. How much in dollars is received on September 1?

d. How much repo interest is paid on December 1?

Reference no: EM131696983

Questions Cloud

Show the cash flow diagrams of the currency swap : Show the cash flow diagrams of this currency swap. Make sure to quantify every cash flow exactly (i.e., use a graph as well as the corresponding number).
Preferred stock or any other outstanding claims : What is the value of the stock price today (Year 0)? Round your answer to the nearest cent. Do not round intermediate calculations.
Company stock price today : What should be the company's stock price today (December 31, 2013)? Round your answer to the nearest cent. Do not round intermediate calculations.
Expected dividend per share : What is the expected dividend per share for each of the next 5 years? Round your answers to the nearest cent.
Should repo be done on the dirty price or the clean price : A treasurer in Europe would like to borrow USD for 3 months. But instead of an outright loan, the treasurer decides to use the repo market.
Determining what evidence reveals to you about a crime : Developing a new product that is superior to competitor's brands. Determining what evidence reveals to you about a crime
Difference between clustering and classification : Q1 Explain the difference between clustering and classification. Q2 Describe the k-means algorithm.
Determining the data warehousing : Having live data accessible all the time for an indefinite period is expensive. This is why data warehousing is so important.
Explain the concept of a virtual desktop to the cio : Describe in detail the proposal regarding the uses of a virtual desktop. Justify your proposal by discussing the benefits of cloud-based virtual storage

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd