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A An investor initially purchased securities at a price of $9,923,418, with an agreement to sell them back at a price of $10,000,000 at the end of a 90-day period. The repo rate is percent.

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hyderali230

Answer:

The repo rate is 3.09% percent

Explanation:

We can use the following formula to calculate the Repo rate

Repo Rate = ( ( Sale Price / Purchase Price ) - 1 ) x ( 360 / n ) x 100

Where

Sale Price = $10,000,000

Purchase Price = $9,923,418

n = 90 days

Placing values in the formula

Repo Rate = ( ( $10,000,000 / $9,923,418 ) - 1 ) x ( 360 / 90 ) x 100

Repo Rate = 3.08692%

Repo Rate = 3.09

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