In a repo (or repurchase agreement), if the Fed buys securities from Firm A with an agreement that Firm A will buy back the securities
from the Fed on the following day, then the Fed is acting as the lender and Firm A the borrower.

Question

Quizplus · Accepted Answer

In a repo, the party selling the securities (in this case, Firm A) is the borrower and the party buying the securities (in this case, the Fed) is the lender.

In a Repo (Or Repurchase Agreement), If the Fed Buys