fixed income

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Joined: Sat Mar 07, 2015 7:07 am

fixed income

Postby aanchalmaryada » Sat Mar 07, 2015 7:09 am

what is the difference between derivatives and repo?

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fixed income

Postby edupristine » Sat Mar 07, 2015 11:06 am

Hi, Derivatives are the instruments used for hedging and speculative purposes. derivatives derive their values from an underlying instruments like bonds, shares, currencies, etc.
Repurchase Agreement also known as repo are money market instruments to raise short term capital. In repo a party sells securities and then buy backs the securities (next day sometimes) at a higher price. For the party agreeing to purchase back security next day, this is a repo.

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