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A repurchase agreement, also known as a "repo" or a "buyback," is a contract that requires a seller of securities, most often treasury securities, to buy the investment back in the future at a designated time and price. An advantage of this investment vehicle is the flexibility of its maturity. A repo may be sold for a fixed period of time, on demand, or renewable on a day-to-day basis. The management invest in repurchase agreements is set out in This statute permits the management to invest in "obligations issued or unconditionally guaranteed by the United States government or any agency thereof and having a maturity from date of purchase of one year or less, or in United States government securities or securities of United States government agencies purchased under an agreement with a trust company, national bank or banking company to repurchase at not less than the original purchase price of said securities on a fixed date, not to exceed ninety days." However, while repose offer flexibility in maturity dates, they are not without risk. In the past, some banks have used the same security for several, simultaneous repurchase agreements. Accordingly, when investing in a repo, the management should make certain to take possession of the underlying security or to receive written notification of the transaction from a third-party trustee who holds the security on behalf of the municipality. In this way, the municipality will be protected in the case of a bank default. Money Market Deposit Accounts (MMDAs) A money market account is a savings account that shares some of the characteristics of a money market fund, a mutual fund that invests solely in short-term securities. These accounts, like other saving accounts, are insured by the Federal government Banks generally place restrictions on money market accounts. The restrictions usually include: A minimum daily balance requirement, with an interest rate reduction if the balance falls below this minimum. A limit on the number of withdrawals, such as 6 per month with a maximum of 3 checks. Under such a limit, a depositor could, for example, write 3 checks and make 3 withdrawal transfers in a month. Alternatively, the depositor might write 2 checks and make 4 withdrawal transfers and two checks, etc. Primary markets allow investors to bid directly for the purchase of securities with issuers and, as a result, tend to provide more favorable prices. Secondary markets permit investors to purchase securities at other times than their issuance dates or to sell securities prior to their maturity dates. General economic conditions affect interest rates, which in turn determine the market behavior of securities in both primary and secondary markets. Confidence in a particular security can also affect its behavior. Confidence is determined by an investor's perception of the financial health of an institution or the collateral behind a security. It tends to be most important in determining the strength and activity of a security in the secondary market. Funny Picture, Video, wallpaper, games Free Study Material For Student Free Tips How To Earn Money Online Without Any Investment
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