A ________ is not a specific security but an arrangement whereby a bank or security dealer sells specific marketable securities to a firm and agrees to repurchase the securities in the future.
A) negotiable certificate of deposit
B) repurchase agreement
C) money market mutual fund
D) commercial paper issue

Question

Quizplus · Accepted Answer

A repurchase agreement is also known as a repo transaction. In this transaction, a bank or security dealer sells specific marketable securities to a firm and agrees to repurchase them at a later date. This arrangement allows the firm to achieve short-term financing while still maintaining ownership of the securities. It is not a specific security, but rather a type of financial arrangement.

A ________ Is Not a Specific Security but an Arrangement