=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)
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, 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
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