In a Reverse Repo (Also Known as a Matched Sale

question 7

True/False

In a reverse repo (also known as a matched sale or a matched sale-purchase transaction), the Fed sells securities and makes a commitment to buy them back at a higher price later.

---

Definitions:

Acquisition Of Inventory

The process through which a business purchases goods to be sold, which may be raw materials for manufacturing or finished goods for resale.

Collection Of Cash

The process by which businesses gather or accumulate monetary payments received from customers.

Committed Operating Loan

A loan agreement where the lender agrees to provide a fixed amount of operating capital to a borrower for a specified term.

Non-Committed

Non-Committed in finance refers to facilities or funding that is not contractually guaranteed and can be withdrawn under certain conditions.