Question: B . Assume that a borrower has a security worth $ 1 0 0 that can be pledged as collateral for a repo transaction. The

B. Assume that a borrower has a security worth $100 that can be pledged as collateral for a repo transaction. The cash supplier agrees to lend $80 with the condition that the borrower repay the cash supplier $88.
What is the repo rate in percentage terms? Show your calculation with the numbers.
What is the haircut in percentage terms? Show your calculation with the numbers.
What happens if the borrower defaults on the loan?
B. Assume that a borrower has a security worth $100 that

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