REVERSE REPURCHASE AGREEMENT Definition

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REVERSE REPURCHASE AGREEMENT (reverse repo) is the opposite of a repo in that it is the purchase of securities (usually government debt) tied to an agreement to sell the security back at a later date at a higher price. Reverse repos are normally short term agreements; primarily on an overnight basis.

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DOCUMENTARY CREDIT is an arrangement by banks for settling international business transactions. A letter of credit is a form of documentary credit.

TAX EFFECT METHOD is where, irrespective of when is a tax payable, its effect should be recognized in the year in which the relevant income has been recorded.

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