First, calculate the market value (dirty price) of the bond at the time of the repo transaction. The bank held the bond for 3 months since the last coupon payment. The semi-annual coupon rate is 5% annually, meaning 2.5% every 6 months.

• Clean Price = $100,000 \times 0.98 = USD 98,000$
• Accrued Interest for 3 months = $100,000 \times 5% \times (3/12) = USD 1,250$
• Dirty Price = Clean Price + Accrued Interest = $98,000 + 1,250 = USD 99,250$

Next, calculate the loan amount after applying the haircut:

• Repo Haircut = 5%
• Loan Amount = $99,250 \times (1 - 0.05) = USD 94,287.5$

Finally, compute the repayment amount at the end of the 6-month repo:

• Repo Interest Rate = 3%
• Repo Term = 6 months
• Interest Owed = $94,287.5 \times 3% \times (6/12) = USD 1,414.31$
• Total Cash Outflow = Principal + Interest = $94,287.5 + 1,414.31 = USD 95,701.81$

This amount rounds to USD 95,702, which matches Option B.