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4#
发表于 2013-4-2 12:11
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Repo market how I understand it: When you hold a long position in a bond, you are losing “opportunity cost” - meaning the money you used to buy this bond is not free. In order to pay for this positions, banks will “repo” out the security. They will borrow the money to hold the long position in the “repo” market and have the bond be the collateral for this money they borrowed.
The yield on the bond for the company holding the position will thus be: the return they are receiving for holding the bond, minus how much it costs to fund the position
Somebody out there - please correct me and expand.
Thanks! |
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