Repurchase agreements are different from federal funds in that:
A) they are secured loans
B) they are federally insured
C) they are not subject to reserve requirements
D) they are not subject to interest rate ceilings

Question

Quizplus · Accepted Answer

Repurchase agreements, often referred to as repos, are indeed different from federal funds transactions primarily because they are secured loans. In a repurchase agreement, securities are sold with an agreement to repurchase them at a later date, effectively providing collateral for the loan, which is not the case with federal funds transactions.

Repurchase Agreements Are Different from Federal Funds in That