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What Happens When a Coupon Is Paid on Bond Collateral

Question 172

Multiple Choice

What happens when a coupon is paid on bond collateral during the term of a classic repo?


A) Nothing
B) A margin call is triggered on the seller
C) A manufactured payment is made to the seller
D) Equivalent value plus reinvestment income is deducted from the repurchase price

Correct Answer:

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