ACI
3I0-012 · Question #740
What happens when a coupon is paid on bond collateral during the term of a classic repo?
The correct answer is C. A manufactured payment is made to the seller. See the full explanation below for the reasoning.
Question
What happens when a coupon is paid on bond collateral during the term of a classic repo?
Options
- ANothing
- BA margin call is triggered on the seller
- CA manufactured payment is made to the seller
- DEquivalent value plus reinvestment income is deducted from the repurchase price
How the community answered
(26 responses)- A8% (2)
- B4% (1)
- C77% (20)
- D12% (3)
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