Which of the Following Observations Concerning Repurchase Agreements Is Not

question 14

Multiple Choice

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

• A)They can be viewed as collateralised short-term loans where a financial security is swapped for cash.
• B)The repurchase market is a highly liquid and flexible source of funds for DIs needing to access liquidity to offset deposit withdrawals.
• C)Repos under the intra-day facility system are discouraged and attract an interest rate charge of 25 basis points above the target cash rate.
• D)It is difficult to transact a repurchase agreement borrowing late in the day.

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