—Assume the following information about two banks. Bank A: has bond with face of $100 million, market value of 99,738,874 million —Bank B: has cash to lend —Term of loan: 32 days —Repo rate (set by market): 1.67% (stated annually) Haircut required by Bank B: 2.83% Bank A and Bank B agree to engage in a repurchase agreement in which Bank A sells the bond to Bank B and agrees to later repurchase it. The amount of money that Bank B is willing to be repaid for the bond when Bank A repurchases it when the agreement expires is: $____________ (rounded to nearest dollar). Can someone please answer this?

A CFA General Discussion About Repurchase Agreement(REPO)

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