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Basic Question 5 of 9
In a repo, any coupon paid by the security during the repurchase agreement belongs to ______.
B. the lender
C. the broker
A. the borrower
B. the lender
C. the broker
User Contributed Comments 4
| User | Comment |
|---|---|
| bmueller82 | Why isn't it the lender. Isn't he holding the security during the repurchase agreement? |
| HolzGe1 | From the textbook: "Note that any coupon paid by the security during the repurchase agreement belongs to the seller of the security (i.e., the borrower of cash)." |
| davidt876 | It would add too much complexity to the agreement to have to factor in the coupon |
| unknown | Borrower of Money |
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Learning Outcome Statements
describe repurchase agreements(repos), their uses, and their benefits and risks
CFA® 2024 Level I Curriculum, Volume 4, Module 4.