Repurchase agreements are:

Question

Quizplus · Accepted Answer

Repurchase agreements, also known as repos, are usually collaterised with government securities, mainly Commonwealth Government securities. These are typically short-term loans where the borrower sells securities to the lender and agrees to repurchase them at a later date, usually the next day, for a slightly higher price that includes interest. As the securities serve as collateral, repos are considered a low-risk transaction.

Therefore, option A is the correct answer. Options B, C, and D are incorrect, as repos are not always low-interest rate loans, do not always have real assets as collateral, and are not none of the given answers.

Repurchase Agreements Are