This agreement occurs when a security is sold with an agreement to buy it back. The repurchase date is usually very short term, often one day. Dealers sell a portion of their securities to entities with cash reserves and agree to buy them back for the principal plus interest. What is this?

Question

Quizplus · Accepted Answer

A repurchase agreement, or repo, is a short-term borrowing for dealers in government securities where the dealer sells the securities to investors with an agreement to repurchase them at a higher price on a specified date.

This Agreement Occurs When a Security Is Sold with an Agreement