Determine the Annualized Implied Repo Rate on a Treasury Bond

question 31

Multiple Choice

Determine the annualized implied repo rate on a Treasury bond spread in which the March is bought at 98.7 and the June is sold at 99.5.The March CF is 1.225 and the June CF is 1.24.The accrued interest as of March 1 is 0.75 and the accrued interest as of June 1 is 1.22.

• A)5.21 percent
• B)10.03 percent
• C)1.28 percent
• D)2.42 percent
• E)0.81 percent

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Definitions:

Automated Jointer

A computer-controlled machine tool used in woodworking to flatten or straighten edges of wood boards, enhancing efficiency and precision.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production based on a chosen allocation base such as labor hours or machine hours.

Manufacturing Overhead

Refers to all indirect costs associated with the production process, including but not limited to, utility costs, maintenance, and supplies that do not directly become part of the finished product.

Direct Labor-Hours

The total hours worked by employees who are directly involved in the production process of goods or services.