medium · Debt Capital Markets secondary-trading-liquidity
When a specific bond goes 'on special' in the repurchase agreement (repo) market, how does its repo rate typically change relative to the General Collateral (GC) rate?
- The GC rate falls to match the special rate.
- The repo rate increases above the GC rate.
- The repo rate stays exactly equal to the GC rate.
- The repo rate falls below the GC rate.
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