Calculate the repo rate, Corporate Finance

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Question:

(a) Distinguish, using financial assets as examples, between securities quoted at par and securities quoted on a discount.

(b) Calculate the value of a £50,000 Treasury bill due in 40 days' time with a rate of interest on comparable securities equal to 4% p.a.

(c) The bank of England agrees to buy a £100,000 bill with an outstanding maturity of 60 days for £99,346.76 and resell the bill to the purchaser in 10 days's time for £ 99,455.04. Calculate the Repo rate.


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