If the Rate on the Repo Is 6

question 47

True/False

If the rate on the repo is 6.5% and the rate on the reverse repo is 6.55%, the dealer firm is borrowing at 6.5% and lending at 6.55%, locking in a spread of 0.55% (fifty-five basis points).

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Definitions:

Core Values

Fundamental beliefs or guiding principles that dictate behavior and action for individuals or organizations.

Measurement Error

The difference between the value that is observed in a measurement and the true value of what is being measured, often due to imperfections in measurement techniques.

Poorly Worded Questions

Queries formulated in a way that makes them difficult to understand or answer accurately, often leading to confusion or misinterpretation.

Social Desirability Effects

The tendency for survey respondents to answer questions in a manner that will be viewed favorably by others, potentially skewing true responses.