A) 4 percent. (1) 5 percent. C) ( percent. D) 9 percent. 12) Govemment securtios dealeri frequently engage is repos to A) manage liquidity. 1) take advantage of anticipated changes in interest rates. C) lend or borrow for a day or two with what is essentially a collateralized loan. D) do all of the above,

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1. To analyze why government securities dealers engage in repurchase agreements (repos), consider the following points:

- Dealers use repos to manage liquidity. By temporarily exchanging securities for cash, they can ensure they have sufficient funds to meet short‐term needs.
   - They also take advantage of anticipated changes in interest rates. Repos allow them to adjust their financing positions quickly when market rates are expected to move.
   - Additionally, repos act as collateralized loans that are typically very short-term (often just a day or two). This enables dealers to either lend or borrow on a very short-term basis while minimizing risk.

2. Since each of these reasons is valid, the complete answer that encompasses all these functions is:

$$
\textbf{D) do all of the above.}
$$
Government securities dealers engage in repos to manage liquidity, take advantage of interest rate changes, and lend or borrow short-term with collateralized loans. So, the correct answer is D) do all of the above.

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