Short Bank Ltd. need funds for a period of 7 days. To meet this financial need, on 20 th September, 2025, Short Bank Ltd. entered into an agreement…
CA Final · Advanced Financial Management · PYQS · January 2026
Short Bank Ltd. need funds for a period of 7 days. To meet this financial need, on 20 th September, 2025, Short Bank Ltd. entered into an agreement with Long Bank Ltd. under which, Short Bank Ltd. will sell 8% GOI Bonds @6% p.a. for 5 crores (Face Value) with initial margin 2%. Each Bond Face Value is 1,00,000. The maturity of this 8% GOI Bond is 31 st December, 2029, originally issued on 1 st January, 2025. Interest payable annually. The clean price of the bond is 99,420. Note: Assume 360 days in a year. From the information given above, choose the correct answer to the Question No. 1 to 3:
Suggested Answer and Working Notes:
Correct Answer: Option (D)
(D) Reverse Repo, Repo
Topics: Security Valuation
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