Which of the following is most like a short-term collateralized loan?
A) certificate of deposit
B) repurchase agreement
C) bankers' acceptance
D) commercial paper

Question

Quizplus · Accepted Answer

A repurchase agreement, or repo, is a short-term loan collateralized by securities. The borrower sells securities to the lender and agrees to repurchase them at a higher price in the future, which represents the interest on the loan. This is similar to a short-term collateralized loan because it involves using securities as collateral for a short-term loan. The other options, such as a certificate of deposit, bankers' acceptance, and commercial paper, do not involve the use of collateral for a loan.

Which of the Following Is Most Like a Short-Term Collateralized