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Which of the Following Statements Is Not Correct? in a Repo

Question 20

Multiple Choice

Which of the following statements is not correct? In a repo:


A) the seller of the security is the borrower of funds.
B) the price of repurchase is known from the beginning of the financial arrangement.
C) the difference between the repurchase price and the selling price is the interest on the loan.
D) if the borrower defaults on the repayment of the loan he/she then has to deliver the underlying securities to the lender.

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