A dealer in government securities is considering buying \$875 million in 10-year Treasury notes and \$1425 million dollars in 6- month Treasury bills….

A dealer in government securities is considering buying \$875 million in 10-year Treasury notes and \$1425 million dollars in 6- month Treasury bills. Current yields on the T-notes average 7.15 percent, while 6-month T-bill yields average 3.28 percent. the dealer can currently borrow \$2,300 million through one week repurchase agreements at an interest rate of 3.20 percent. compute the dealer’s expected carry income in each of the following scenarios. ( hint: A spreadsheet can be most useful here. perform the succession of calculations for the T-bill in row 2; and the expenses from the RP in row 3. Then, compute the carry income from the appropriate columns where income and expenses have been computed for each scenario.)a. the dealer purchases the T-notes and T-bills and finance them with the RP under the terms listed above.b. Same as part (a) above except that interest rates change to 7.30 percent on the T-notes, 5.40 percent on the T-bills purchases at the new RP rate.c. Same as part (b) above except the dealer had not purchased the T-notes and T-bills until after interest rates changed.d. Repeat part(b) in the case where rates changed to 7 percent on the T-notes and 5.10 percent on the T-bills, and 4.5 percent on the RP.e. Repeat part (b) except the dealer had not purchased the T-notes and T-bills until after the interest rates changed.f. Based on the above results, is it always good for the dealer when interest rates rise? How about when they fall? please explain.g. Could the dealer have benefited by a short position in case (b) or (d) above?

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.