(Consider This) Repo transactions involve , while reverse repo transactions
A)an overnight collateralized loan from a bank to the Fed; involve the bank borrowing from the Fed.
B)an overnight collateralized loan from the Fed to a bank; involve the Fed borrowing from the bank.
C)monetary expansion; constitute restrictive monetary policy.
D)banks foreclosing on delinquent mortgages; involve the Fed buying the real properties from the bank.

Question

Quizplus · Accepted Answer

In a repo transaction, the Fed provides an overnight collateralized loan to a bank, effectively lending money. In a reverse repo, the Fed borrows money from the bank, taking in cash and providing securities as collateral.

(Consider This) Repo Transactions Involve , While Reverse Repo Transactions