Which of the Following Statements Is NOT Correct? in a Repo

question 14

Multiple Choice

Which of the following statements is NOT correct? In a repo:

• A)the seller of the security is the borrower of funds.
• B)the difference between the repurchase price and the selling price is the interest on the loan.
• C)if the borrower defaults on the repayment of the loan he/she then has to deliver the underlying securities to the lender.
• D)the price of repurchase is known from the beginning of the financial arrangement.

Understand the importance of complying with legal responsibilities within an organization.

Understand the impact of international agreements and regional economic communities on global trade dynamics.

Recognize the economic and business characteristics of various global regions.

Identify challenges and opportunities for international business in Africa.

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Definitions:

Retained Earnings

The portion of net income that is retained by a company rather than distributed to its shareholders as dividends.

Coupon Rate

The interest rate on a bond which the issuer pays to the bondholders, generally fixed and paid at specific intervals.

Yield to Maturity

The total anticipated return on a bond if held to its maturity date, including all interest payments and capital gains or losses.

Required Rate of Return

The minimum return an investor expects to achieve by investing in a particular asset, taking into account the risk level of the investment.