Agreement which incurs transaction between two parties and promise held that second party will sell security at specific maturity is classified as

A. repurchasing commercial notes

B. repurchase bills

C. purchase agreement

D. reverse repurchase agreement

Answer: Option D

Solution(By Examveda Team)

Agreement which incurs transaction between two parties and promise held that second party will sell security at specific maturity is classified as reverse repurchase agreement. A reverse repurchase agreement, or "reverse repo", is the purchase of securities with the agreement to sell them at a higher price at a specific future date.