Ch.5 · SID, SAI and KIM Documents · hard
What is the 'repo transaction' that debt mutual fund schemes are permitted to undertake?
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EXPLANATION
A repo (repurchase agreement) is a short-term borrowing mechanism where a scheme sells securities and simultaneously agrees to repurchase them at a slightly higher price after a specified period. Repos allow debt schemes to manage short-term liquidity needs. Reverse repos (lending cash against securities) are also used to deploy surplus cash overnight.
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