Which of the Following Statements Is True Regarding Repurchase Agreements

question 10

Multiple Choice

Which of the following statements is true regarding repurchase agreements?

• A)their maturity is greater than one year
• B)they are an unsecured form of borrowing
• C)treasury bills serve as their collateral
• D)they make explicit, rather than implicit, interest payments

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Definitions:

Maturity Value

The total amount that will be paid to an investor at the end of a debt instrument's term, including the principal and any accrued interest.

Income Statement

A financial report that shows a company's financial performance over a specific period, detailing revenues, expenses, and net income.

Interpret

To explain or provide the meaning of something, often involving analysis of data or information to derive understanding or conclusions.

Years

A unit of time used in various financial calculations, such as the amortization of assets or the term of investments.