A 'Repo' Is a Transaction Where

question 23

Multiple Choice

A 'repo' is a transaction where:

• A) a bearer security is changed to an inscribed security.
• B) the RBA issues debt securities on behalf of State governments.
• C) a hybrid security is created involving both a debt and equity instrument.
• D) a security is bought or sold under an agreement that the transaction will be reversed a short time later.

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Definitions:

Market Value

Market value is the current price at which an asset or service can be bought or sold in the open market.

All Cash Deal

A type of transaction where the purchase of a company or asset is made entirely with cash, without the use of stocks or other forms of financing.

Incremental Value

The additional value generated from a particular action or decision, compared to what would have occurred without it.

Equity-Financed

A method of raising capital by selling company shares to investors as opposed to incurring debt.