A repurchase agreement occurs when:

Question

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A repurchase agreement, also known as a repo, is an agreement where an investor buys securities from a dealer and simultaneously agrees to sell them back at a specified price and date. This is commonly used in the market for government securities, where a dealer will sell securities to an investor and agree to buy them back the next day. This is a way for dealers to quickly acquire cash to finance their inventory, while investors can earn a short-term profit on their investment. Choices A, B, and D do not accurately describe a repurchase agreement.

A Repurchase Agreement Occurs When