A repurchase agreement occurs when a firm sells a Treasury bill and agrees to buy it back at a lower price.

Name: A repurchase agreement occurs when a firm sells a Treasury bill and agrees to buy it back at a lower price.
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Question

A repurchase agreement occurs when a firm sells a Treasury bill and agrees to buy it back at a lower price.​

Quizplus · Accepted Answer

A repurchase agreement involves a firm selling a security (such as a Treasury bill) and agreeing to buy it back at a later date for a higher price, not a lower one. The difference in price represents the interest.

A Repurchase Agreement Occurs When a Firm Sells a Treasury