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Explanation:
The repurchase price is:
\`$159` \left(1 + (0.0026 \times \frac{122}{360}\right)) = \`$159.14` \text{ million}No comments yet.
Q.2974 Supposing that DBR 4s of face value $120 million of January 14th, 2030, are to be sold by HJK Bank to a counterparty for settlement for $159 million. HJK Bank selling the DBR 4s then decides to buy the $120 million face amount some 122 days later for settlement at a buying price equal to that of the invoice price with a repo rate of 0.26%. At what price can HJK Bank repurchase the bond?
A
$159.14 million
B
$121.65 million
C
$150.11 million
D
$121.33 million