Thursday, December 31, 2009

Repo man

Because money market accounts pay around a half per cent interest, Franklin seeks investment alternative to boost return.
Franklin Finance Director Cal Patterson said Wednesday that he is recommending the Small Business Administration repurchase agreement, or SBA repo, because it has a higher interest rate and is guaranteed by the federal government.

The anticipated interest rate is 1.65%. I assume the City is seeking minimal risk and usually a higher rate reflects higher risk of some kind.

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