Agreement which incurs transaction between two parties and promise held that second party will repurchase security at specific price is classified as

A repurchasing commercial notes
B repurchase bills
C repurchase agreement
D reverse repurchase agreement

Correct Answer: repurchase agreement

Agreement which incurs transaction between two parties and promise held that second party will repurchase security at specific price is classified as repurchase agreement. A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities. In the case of a repo, a dealer sells government securities to investors, usually on an overnight basis, and buys them back the following day at a slightly higher price.

Related Questions

Agreement which incurs transaction between two parties and promise held that second party will sell security at specific maturity is classified as
If you make a promise, you must keep it. The "If you make a promise" clause is:

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