CHAPTER 10
REPURCHASE AGREEMENTS AND CERTIFICATES OF DEPOSIT
Repurchase agreements (repos)
A repo is a way of borrowing large amounts of money for a short time using a sale and repurchase agreement in which securities are sold for cash at an agreed price with a promise to buy them back, or identical ones, at a specified (higher) price at a future date. The interest on the agreement is the difference between the initial sale price and the agreed buy-back.
One, or a few days, later:
Because the agreements provide collateral backup for the ...
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