Solution-What is the size of the haircut in the deal

What is the size of the haircut in the deal

Reference no: EM132618023

A certain investor has approached you wishing to set up a repurchase agreement for $15,000,000 for 25 days. You have agreed to do so but will require collateral of $17,200,000 in U.S. Treasury bills with a repro rate of 2.12% to structure the deal.

Problem 1: What is the size (%) of the haircut in this deal?

Problem 2: How much will you receive ($) from the investor when the Repo is settled in 15 days?

Reference no: EM132618023

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What is the size of the haircut in the deal

Reference no: EM132618023

Reference no: EM132618023

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