Which of the following observations concerning repurchase agreements is NOT true?
A)They can be viewed as collateralized federal funds transactions.
B)The RP market is a highly liquid and flexible source of funds for DIs needing to increase their liabilities and to offset deposit withdrawals.
C)Unlike fed funds, these transactions cannot be rolled over each day.
D)It is difficult to transact an RP borrowing late in the day.
E)Negotiations over the collateral package can delay RP transactions.

Question

Quizplus · Accepted Answer

Repurchase agreements can typically be rolled over each day, contrary to what is stated in option C. This is one of the key benefits of the RP market for DIs.

Which of the Following Observations Concerning Repurchase Agreements Is NOT