Rehypothecation

Definition:

Pledging to banks by securities brokers of the amount in customers' margin account as collateral for broker loans, which are used to cover margin loans to customers for margin purchases and selling short.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Interfund transactions

Financial arrangements effected by payments made from one fund group (either Federal funds or trust funds) to another group.

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