Answered Essay: You are given the following data on 8/24/2015 settlement date: and the following data on 8/28/2015 settlement date: a) On

2. You are given the following data on 8/24/2015 settlement date: Bid Price 1.875102.4922 144.6719 Asked Price 102.5078 144.6875 Annual Coupon Rate Maturity 8/15/2025 and the following data on 8/28/2015 settlement date: 6.875 MaturityAnnual Coupon Rate Bid Price 102.1875 Asked Price 102.2031 142.4688 8/31/2017 1.875 6.875 2 8/15/2025 142.4531 a) On 8/24/2015, open a repo position using the 8/31/2017 maturity bond and close the position on 8/28/2015. Compute the profit/loss on this transaction. b) On 8/24/2015, open a reverse repo position using the 8/15/2025 maturity bond and close the position on 8/28/2015. Compute the profit/loss on this transaction. Use an annual repo rate of 1.0% and an annual reverse repo rate of 1.5%. Explain why you made a profit/loss in each of the above transactions. Also, make sure to account for accrued interest in xour calculations and choose the bid or ask price appropriately. If you are using the Excel function for accrued interest, make up an Issue Date as the coupon payment date just prior to the settlement date.

You are given the following data on 8/24/2015 settlement date: and the following data on 8/28/2015 settlement date: a) On 8/24/2015, open a repo position using the 8/31/2017 maturity bond and close the position on 8/28/2015. Compute the profit/loss on this transaction. b) On 8/24/2015, open a reverse repo position using the 8/15/2025 maturity bond and close the position on 8/28/2015. Compute the profit/loss on this transaction. Use an annual repo rate of 1.0% and an annual reverse repo rate of 1.5%. Explain why you made a profit/loss in each of the above transactions. Also, make sure to account for accrued interest in your calculations and choose the bid or ask price appropriately. If you are using the Excel function for accrued interest, make up an Issue Date as the coupon payment date just prior to the settlement date.

Expert Answer

 

1. Repo Position Gain/loss:

Sl Particulars Calculation Amount
A. Sell security at Bid Price 102.4922
B. To be purchased at 102.4922*1%*7/365+102.4922 102.5119
C. If I purchase on 8/28 Ask Price 102.2031
D. Loss on security B-C 0.308756
E. intrest income 102.4922*1.875%*4/365 0.02106
F. Net loss on security D-E 0.287696

b. Reverse Repo positionGain/loss

Sl Particulars Calculation Amount
A. Buy security at Ask Price 144.6875
B. To be sold at 144.6875*1.5%*9/365+144.6875 144.7410
C. If I sold on 8/28 Bid Price 142.4531
D. Gain on security B-C 2.2879
E. intrest loss 144.6875*6.875%*13/365 0.354286173
F. Net gain on security D-E 1.933628382
Buy Essay
Calculate your paper price
Pages (550 words)
Approximate price: -

Help Me Write My Essay - Reasons:

Best Online Essay Writing Service

We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.

Our Writers are Experienced and Professional

Our essay writing service is founded on professional writers who are on stand by to help you any time.

Free Revision Fo all Essays

Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.

Timely Essay(s)

We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.

Customised Essays &100% Confidential

Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.

24/7 Customer Support

Our agents are ready to help you around the clock. Please feel free to reach out and enquire about anything.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

HOW OUR ONLINE ESSAY WRITING SERVICE WORKS

Let us write that nagging essay.

STEP 1

Submit Your Essay/Homework Instructions

By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.

STEP 2

Pick A & Writer

Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.

STEP 3

Editing (OUR PART)

At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.

STEP 4

Receive your Paper

After Editing, your paper will be sent to you via email.