Google Answers: Financial Institutions and Markets

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Q: Financial Institutions and Markets ( Answered, 0 Comments )

Question

Subject: Financial Institutions and Markets
Category: Business and Money > Finance
Asked by: chooseme-ga
List Price: $2.50

Posted: 21 Apr 2003 08:01 PDT
Expires: 21 May 2003 08:01 PDT
Question ID: 193287

A repurchase agreement calls for an investor to buy securities for
$4,925,000 and sell them back in 60 days for $5,000,000.  What is the
yield?

Answer

Subject: Re: Financial Institutions and Markets
Answered By: omnivorous-ga on 21 Apr 2003 08:25 PDT

Chooseme --

The 60-day profit is $75,000 or 1.52%.  The annualized yield is 365/60
* 1.52% = 9.26%.

Best regards,

Omnivorous-GA

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