Question

Repurchase agreements are usually used by banks that:

a. cannot obtain financing from any other source.
b. have negative net worth.
c. need cash for a very short period of time.
d. have a need for long-term financing.

Answer 1

The correct option is C

Step-by-step explanation:

Repo stands for the Repurchase agreement, which is an agreement that is form or kind borrowing which is short- term in nature for the dealers in the government securities.

Under the case of repo, the dealer sells or sold the securities of government to the investors, mostly on the basis of overnight and then they bought them back at the higher price.

But when the agreement is used by the banks which need or require the cash for a very short time of period .