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12 _ 42) A firm that has large securities holdings and wishes to raise money for a short length of time may be able to find t
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Answer #1

In case of a repurchase agreement, a bank will purchase the securities from the firm (by paying money) and sell it back to the firm after a short term at a specified price.
The banker's acceptance is a financial instrument that guarantees a future payment to the holder of the instrument.
Commercial paper are used by large corporations to raise funds. It is unsecured form of debt, so risk is higher and hence the cost of raising funds is high.

The repurchase agreement carries least risk. As the risk is less, the financing will be cheapest.

Answer: Hence, option A is correct.

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