The Repo rate The risk-free rate available to investors is the repo rate repurchase agreement You sell securities to another investor Buy them back at a higher price The difference between the two prices is the interest earned by the counterparty Charles cao6 Charles Cao The Repo Rate ◼ The risk-free rate available to investors is the repo rate, repurchase agreement ◼ You sell securities to another investor ◼ Buy them back at a higher price ◼ The difference between the two prices is the interest earned by the counterparty