_____________ is a short-term debt security sold by a business firm or financial institution to another business or institution where the seller agrees to buy back the security at a specified price and date.
A) A negotiable certificate of deposit (NCD)
B) A repurchase agreement
C) Commercial paper
D) A banker's acceptance

Question

Quizplus · Accepted Answer

This type of short-term debt security is known as a repurchase agreement, where the seller agrees to buy back the security at a predetermined price and date. Option A, a negotiable certificate of deposit (NCD), is another form of short-term debt but does not involve a buyback agreement. Option C, commercial paper, is a type of short-term unsecured promissory note issued by corporations, but it does not include a buyback agreement. Option D, a banker's acceptance, is a type of short-term negotiable debt instrument that is typically used to facilitate international trade transactions and is only issued by banks.

_____________ Is a Short-Term Debt Security Sold by a Business