A dealer forecasts that the discount rate on a 60-day bill, thirty days from now, will be

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A dealer forecasts that the discount rate on a 60-day bill, thirty days from now, will be 4.80%. The current discount rate on a 90-day bill is also 4.80%. The dealer is thinking about repoing the 90-day bill.

What is the highest 30-day repo rate the dealer can afford to pay and still expect to break even? Explain.

Related Book For answer-question

Principles of Auditing and Other Assurance Services

ISBN: 978-0078025617

19th edition

Authors: Ray Whittington, Kurt Pany

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Posted Date: Mar 16, 2023 01:06 AM

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A dealer forecasts that the discount rate on a 60-day bill, thirty days from now, will be

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To break even the dealer needs to earn the same amount of interest from repoing the 90day bill ... View the full answer

Principles of Auditing and Other Assurance Services

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