When the Fed Undertakes a "Repo" Transaction with a fiNancial

question 35

Multiple Choice

When the Fed undertakes a "repo" transaction with a financial institution, the Fed in essence

• A) grants a collateralized loan to the financial institution.
• B) provides an insurance coverage to the financial institution.
• C) buys shares of stock of the financial institution.
• D) reduces the reserves of the financial institution.

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