medium · Debt Capital Markets
An investor holds a 5-year bond yielding 4.00% financed at a repo rate of 3.00%.
If the current 4-year yield on the same curve is 3.80%, what is the total expected return over a one-year horizon assuming a static yield curve?
- 4.00%
- 2.00%
- 1.00%
- 0.20%
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