In this case, the transaction is a reverse-repurchase agreement because the bank agrees to purchase securities under an agreement to resell.

In this case, the transaction is a reverse-repurchase agreement because the bank agrees to purchase securities under an agreement to resell. The bank is buying (investment of funds) the securities owned by Salami Brothers (liquidity provided; funds gained for period of reverse-repo). Technically it is not a loan, but a purchase (bank) with agreement to resell, but the effect is the same as a loan to a customer. (b) Is the loan collateralised? What is the collateral? Who holds the collateral during the term of the agreement?

Order the answer to view it

Place this order or similar order and get an amazing discount. USE Discount code “GET20” for 20% discount

Posted in Uncategorized