The one-month (31-day) GC repo rate for French government bonds is quoted to you at 3.75- 80%. As collateral, you are offered EUR 25,000,000.00 nominal of the 5.5% OAT April 2012, which is worth EUR 28,137,500.00. The Repurchase Price is:
A) EUR 28,228,360.69
B) EUR 28,229,572.15
C) EUR 25,080,729.18
D) EUR 25,081,805.55

Question

Quizplus · Accepted Answer

The Repurchase Price is calculated using the formula: Repurchase Price = Sale Price * (1 + (Repo Rate * (Days/360))). Using the given repo rate of 3.75% and the collateral value of EUR 28,137,500.00, the calculation yields EUR 28,228,360.69.

The One-Month (31-Day) GC Repo Rate for French Government Bonds