Dollar earning and rate of return on invested capital


A repo dealer can borrow at 3% using general collateral. he chooses a 5 year bond with a coupon of 4%. Assume market prices dor not change and that the haircut is 1%. Assume the amount of the trade is $1,000,000. Compute the dollar earning and the rate of return on invested capital

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: Dollar earning and rate of return on invested capital
Reference No:- TGS052673

Expected delivery within 24 Hours