Repurchase price is subtracted from selling price divided by selling price and multiplied to 360 by number of days Up to maturity to calculate

A. repurchase agreement yields

B. purchase agreement yields

C. repurchase yields

D. transaction yields

Answer: Option A

Solution(By Examveda Team)

Repurchase price is subtracted from selling price divided by selling price and multiplied to 360 by number of days Up to maturity to calculate repurchase agreement yields. In this agreement, the counterparty gets the use of the securities for the term of the transaction, and will earn interest stated as the difference between the initial sale price and the buyback price. The interest rate is fixed, and interest will be paid at maturity by the dealer.