The main difference between a repo and federal funds transaction is that
A) the repo transaction uses the securities for collateral while the federal funds transaction does not have collateral.
B) the federal funds transaction uses securities for collateral while the repo transaction does not have collateral.
C) the repo transaction has an agreed upon interest rate while the federal funds transaction has a spread between the sale and purchase price of securities.
D) the federal funds transaction is normally overnight while the typical repo agreement is for 90 to 180 days.
Correct Answer:
Verified
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