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Repo

• See repurchase agreement.

• An agreement in which one party sells a security to another party and agrees to repurchase it on a specified date for a specified price. See: repurchase agreement.

 
 Embedded terms in definition
 Purchase agreement
Security
 
 Referenced Terms
 Add on rate: A specific rate of interest to be paid. Stands in contrast to the rate on a discount security, such as a Treasury bill, that pays no interest. Repo rate is an add-on rate.

 Buy back: Another term for a repurchase agreement.Another term for a Repo.

 Cash and carry: Purchase of a security and simultaneous sale of a future, with the balance being financed with a loan or Repo.The actual market price plus any carrying costs such as interest cost and storage costs. Typically used in futures and forwards to describe the fundamental value (or the warranted value) of the contract.

 Cheapest to deliver issue: The acceptable Treasury security with the highest implied Repo rate; the rate that a seller of a futures contract can earn by buying an issue and then delivering it at the settlement date.

 Figuring the tail: Calculating the yield at which a future money market (one available some period hence) is purchased when that future security is created by buying an existing instrument and financing the initial portion of its life with a term Repo.Calculating the yield at which a future money market instrument (one available some period hence) is purchased when that future security is created by buying an existing instrument and financing the initial portion of life with a term Repo.

 
 Related Terms
 Flex repo
Gestation repo
Implied repo rate
Open repo
Overnight repo
Repurchase agreement repo or rp
Reverse repo
Term repo

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