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Which of the Following Statements Is Not True with Regard

Question 56

Multiple Choice

Which of the following statements is not true with regard to repurchase agreements?


A) In a typical repo, an entity sells government securities and agrees to repurchase them at a higher price the next day.
B) A reverse RP involves borrowing funds overnight.
C) The repo market has evolved into maturities ranging from one day to three months.
D) In practice, a repo is used to raise funds for anything the borrower chooses.

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