=3000000(1+0.055*91/365) An NCD is issued by a South African bank with a nominal value of R 3 000 000 for
3041136.986 91 days at an annual interest rate of 5.500% . Then, 36 days later ( i.e. 55 days
before the expiry), the NCD is traded at a market interest rate of 6.000% What is the
capital profit/loss of the primary market buyer after the sale in the secondary
P = MV / (1 + i x n) market? (note: indicate a loss with a "-" before the amount) Answer: R
3041136.986/(1+0.06*55/365) Accrued int=3000000*55/365*0.06
-13235.16 27123.29
3013888.134
Capital profit (loss)= total income - accrued interest
13888.13-27123.29
Question 2 The Land and Agricultural Bank of South Africa issues a Land Bank bill with a
Not yet nominal value of R 2 000 000 , it has a tenure of 92 days and it is issued at a
answered discount rate of 12.00% . Then, 49 days later (i.e. 43 days before the expiry), the
Marked out of original investor trades the instrument at a discount rate of 10.80% . What is the
1.00 rand percent price of the instrument when it is traded in the primary market? (note:
Flag if the answer is R5.555%, answer 5.555). Answer: R 98.728 %
question
Price = 1 - (0,1080 x 43/365)
OSCAR THE TUTOR
oscardiura@gmail.com
+27737560989
for FAC MAC ECS DSC TAX QMI FIN INV BNU STA
tutorials
, ECS2605-24-S2 Welcome to ECS2605! Assessment 4
QUIZ
Question 3
Not yet answered
Marked out of 1.00
A South African bank experiences a financial deficit and enters into a classic fixed 7 day repurchase agreement with the
SARB at a repo rate of 5.25%. ONE of the following bonds serve as the underlying instrument for this transaction:
[Government Bond - Principal: R 12 000 000 Issue date: 11 January 2021 Expiry date: 31 March 2045 Coupon rate: 10.73%
Coupon payment dates: 31 March and 30 September The bond register closes one month before the coupon payment
dates.] Market price of the bond on the start date of the repo: R 103.250% Market price of the bond on the end date of the
repo: R 98.750% . Under this agreement, what amount does the bank pay? Answer: R 103.252
0.1073*7/365+103.250
Question 4
Not yet answered
Marked out of 1.00
A financial manager has a call option on one kilogram of platinum at a strike price of R544 199. On the expiry date, the
market price of one kilogram of platinum is R515 183. The financial manager will NOT exercise the option.
Select one:
True
False
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller oscardiura. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $6.30. You're not tied to anything after your purchase.
