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Repo (Repurchase Agreements) Course Overview
This Repo course examines the core concepts of short-term funding. We will look at the different types of repos, alongside who would use them and why, while assessing the risks of the trade along the way. From the nuances of what motivates a repo trade to how to calculate payments, we will go through the broadest concept to the smallest detail.
Repo (Repurchase Agreements) Learning Objectives
This Repo course will give you a practical understanding of how the repo market allows financial institutions that own large volumes of securities to borrow cheaply, while simultaneously allowing others that hold excess cash to earn small returns with low risk. Major learning outcomes of this course include being able to:- Explain the full life cycle of a repo trade from the perspective of both counterparties
- Calculate repo interest, as well as security generated income (i.e., coupon), and understand their treatment
- Identify the differences between general collateral and special repos, and in what scenario each trade type is used
- Compare and contrast the differences between repos/reverse repos and buy sell backs/sell buy backs
- Appreciate the risks associated with entering into repo trades and how they can be managed
- Explain the concept of negative rates in the repo world and understand their significance
