The largest category of liabilities of broker-dealers as of the beginning of 2012 was

Question

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Securities sold under repurchase agreements, also known as repos, represent the largest category of liabilities for broker-dealers. These are agreements in which the broker-dealer sells securities to a counterparty and simultaneously agrees to repurchase them at a later date at a slightly higher price. This amount is effectively an interest payment to the counterparty for lending the securities to the broker-dealer. This type of financing is commonly used by broker-dealers to fund their operations, but it also exposes them to the risk that the counterparty will not be able to return the securities at the agreed-upon price.

The Largest Category of Liabilities of Broker-Dealers as of the Beginning