Based on the fact that Leonard oil refiners inc. needs to borrow $1 million overnight and is willing to secure the loan with a portfolio of securities and the borrower will repurchase tomorrow at a higher price. this is an example of a repurchase agreement
This refers to the type of agreement that is made between a dealer and investors and is a short-term borrowing usually in government securities that usually leads to repurchase the item at a higher price.
Hence, we can see that the given question is a perfect example of this repurchase agreement as the company, Leonard oil refiners inc. needs to borrow $1 million overnight and trades their securities.
With this in mind, the correct answer is a repurchase agreement
In conclusion, it can be seen that to secure the loan with a portfolio of securities that the borrower will repurchase tomorrow at a higher price. this is an example of a repurchase agreement
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