Higher the repo rate, longer the repo term

CFA Level II Fixed Income
#1

If the seller sells a security for $940K and repurchases in 90 days for $947K, the repo rate can be derived as

HPR = 947,000/940,000 - 1 = 0.75%
Repo rate = annualised HPR = (1 + 0.75%) ^ (365/90) - 1 = 3.05%

Wouldn’t this be lower for longer terms? e.g. 300 days would give us a repo rate of 1.075 ^ (365/300) - 1 = 0.91%

I must be missing something. Thanks in advance!

#2

You’re assuming that the prices for 300 days would be the same as the prices for 90 days: $940K and $947K. They wouldn’t be.

#3

I see. Thank you for clarifying!

#4

My pleasure.