Question

Distinguish the benefits of the Federal Reserve issuing repurchase agreements (repos) and reverse repurchase agreements (reverse repos).(1 point)
Banks can buy repos from other financial institutions at a discount. Banks can sell reverse repos to other financial institutions for increased liquidity.
Repos result in a temporary increase in a bank's reserves and maintain liquidity in the banking system. Banks can sell reverse repos back to the Federal Reserve at a higher price in a short period of time.
Banks can sell repos to other financial institutions for increased liquidity. Banks can buy reverse repos from other financial institutions at a discount.
Banks can sell repos back to the Federal Reserve at a higher price. Reserve repos result in a temporary increase of a bank's reserves and maintain liquidity in the banking system.

Answer 1

Answer:

Repos result in a temporary increase in a bank's reserves and maintain liquidity in the banking system. Banks can sell reverse repos back to the Federal Reserve at a higher price in a short period of time.

Explanation:

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