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Understanding Repurchase Agreements: The Key Financial Tool for Short Sale Settlements
What is the name of an arrangement involving the transfer of a financial asset in return for another financial asset which is later reversed through the repurchase of each entity’s initial financial assets at a predetermined price, the purpose for which is settling short sales of securities or covering failed sales by a bank’s customer? A. Repurchase agreement B. Securitization C. Factoring arrangement D. Securities lending arrangement

A. Repurchase agreement