1. JP Morgan Chase is currently processing repos with the following quoted rates, each for amounts of $20 million and for a period of 2 days. What are the interest payment amounts in dollars for each repo? Compute and graph the interest amounts in excel.
Quoted Yield
Repo 1 25bps
Repo 2 75bps
Loan 3 95bps
Loan 4 150bps
Loan 5 175bps
Loan 6 265bps
Loan 7 320bps
2. From below choose an ideal bank assumption.
Interest rates are higher for loans than deposits.
There are service charges and transaction fees.
Interest rates for different durations are not the same.
Interest rates do not depend on the size of principal.