Which of the Following Money Market Investments Is Essentially a Loan

question 84

Multiple Choice

Which of the following money market investments is essentially a loan arrangement wherein a securities dealer is the "borrower" and the investor is the "lender"? The investor buys securities from the securities dealer, with an agreement to sell the securities back to the dealer at a later date for a specified higher price.

• A) certificates of deposit
• B) commercial paper
• C) banker's acceptance
• D) repurchase agreement
• E) Treasury bills

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Definitions:

Fairness

Fairness relates to impartial and just treatment or behavior without favoritism or discrimination.

Personal Winnings

Personal winnings refer to the gains an individual acquires, which can derive from gambling, competitions, or any activities resulting in earnings beyond regular income.

Better Informed

A state in which an individual or party has more knowledge or information than others, often providing an advantage in decision-making or negotiations.

Imbalance

A situation where different elements are not in a correct proportion or relationship to each other, often leading to inefficiency or disorder.