Which of the Following Functions Does a To-Party Repo Agent

question 434

Multiple Choice

Which of the following functions does a to-party repo agent not perform?

• A) It checks the eligibility and sufficiency of collateral
• B) It can impose an initial margin on behalf of the buyer and manages margin calls
• C) It manages substitution of collateral on behalf of the seller
• D) It participates in the risk of transactions if one of the parties defaults

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Definitions:

Maturity Value

The amount of money an investment will earn and pay out at the end of its life, including the initial principal and all accumulated interest.

Capitalize Interest

The process of adding interest costs to the balance sheet for the construction of long-term assets, instead of expensing them in the period they are incurred.

Economic Benefit Approach

A method used in accounting and taxation to evaluate transactions based on the economic value received as opposed to the legal form of the transaction.

Economic Worth

The value of an asset, company, or service determined through market dynamics, financial performance, and future earnings potential.