The overnight repurchase rate is the rate charged on overnight loans, which are collateralized, by which one of the following securities?
A)Treasury securities
B)municipal bonds
C)commercial paper
D)banker's acceptances
E)Eurodollar deposits

Question

Quizplus · Accepted Answer

The overnight repurchase rate is typically based on the interest rate of Treasury securities because they are considered to be a low-risk investment. Other securities such as municipal bonds, commercial paper, banker's acceptances, and Eurodollar deposits may also be used as collateral for overnight loans, but they may have different rates depending on their perceived risk.

The Overnight Repurchase Rate Is the Rate Charged on Overnight