The repo market:
A)is where the Federal Reserve makes loans to banks.
B)refers to transactions between lenders and borrowers with bad credit.
C)is the market for houses in foreclosure.
D)is the overnight credit market.

Question

Quizplus · Accepted Answer

The repo market is a short-term (usually overnight) credit market where financial institutions can borrow and lend funds. It involves the sale and repurchase of securities with an agreement to repurchase at a higher price, which serves as collateral for the loan. This market is important for maintaining liquidity in the financial system.

The Repo Market