Find the best solutions to your questions at Westonci.ca, the premier Q&A platform with a community of knowledgeable experts. Discover reliable solutions to your questions from a wide network of experts on our comprehensive Q&A platform. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform.

What type of repurchase agreement would the dealer need if there was a possibility that it could take several days to sell the securities?

Sagot :

Overnight Repurchase Agreement is the type of repurchase agreement which the dealer would require if there is a possibility that it could take several days to sell the securities.

Overnight Repurchase Agreement is an elaborative term for borrowing by dealers of government securities for a short duration of time. It is also known as Repo rate. In this process a dealer sells various government securities to distributors or investors on overnight basis or in the form of short term secure loan. This can be bought back whenever needed at higher prices to gain better profits.

These securities act as collateral for the dealers which they consider as a safe investment. It is an effective alternative investment used in open market operations. repo markets facilitates liquidity of cash (easy flow of cash) and other securities in an economical system which benefits the overall market and sustains high inflation. Thus the allocation of capital in the economy is smoothened which further enhances the GDP (Gross Domestic product) of the country.

Learn more about GDP at:

brainly.com/question/13511171

#SPJ4

We hope our answers were helpful. Return anytime for more information and answers to any other questions you may have. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Stay curious and keep coming back to Westonci.ca for answers to all your burning questions.