Business, Legal & Accounting Glossary
A form of repurchase agreement in which an investor sells a mortgage-backed security during one period and repurchases it in a subsequent period. While the investor gives up access to the principal and interest on the loan that is sold, the proceeds from the sale of the security could be reinvested and then used to repurchase the security later. The investor hopes that the difference between the original price and the repurchase price (“the drop”) is high. A large difference between the original price and the repurchase price results in the security being considered “on special”.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Dollar Roll are sourced/syndicated and enhanced from:
This glossary post was last updated: 20th November, 2021 | 0 Views.