Question

Repurchase Agreements are used by large institutions as short term loans

a.	Of government securities used as collateral that are sold by a party to another party with expectations of buying back the securities at a target price and target date within a year.
b.	called fed funds
c.	Called common stock
d.	Called municipal bonds

Answer 1

Option A is correct

Repurchase agreements (repos) are short- term lending instruments. The term can be as short as overnight. A borrower seeking funds will sell an instrument—typically a high-quality bond—to a lender with an agreement to repurchase it later at a slightly higher price based on an agreed-upon interest rate.

Repurchase Agreements are used by large institutions as short term loans ,

- Of government securities used as collateral that are sold by a party to another party with expectations of buying back the securities at a target price and target date within a year.