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

Answer: Option C

Agreement which incurs transaction between two parties and promise held that second party will repurchase security at specific price is classified as repurchase agreement. A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities. In the case of a repo, a dealer sells government securities to investors, usually on an overnight basis, and buys them back the following day at a slightly higher price.