Which of the Following Observations Concerning Repurchase Agreements Is NOT

question 85

Multiple Choice

Which of the following observations concerning repurchase agreements is NOT true?

• A)They can be viewed as collateralized federal funds transactions.
• B)The RP market is a highly liquid and flexible source of funds for DIs needing to increase their liabilities and to offset deposit withdrawals.
• C)Unlike fed funds, these transactions cannot be rolled over each day.
• D)It is difficult to transact an RP borrowing late in the day.
• E)Negotiations over the collateral package can delay RP transactions.

---

Definitions:

Raw Materials

Basic natural or processed materials that are used in manufacturing and production to create final products.

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and outflows over a period, used to assess the profitability of investments.

Rule of 72

A mathematical rule to estimate the number of years required to double an investment at a given annual fixed interest rate.

$10,000

A numerical figure representing a specific amount of money, notable in various financial contexts.