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On the other hand, if the analyst projects that the institution will have surplus money on hand beyond that needed by its clients that day, then it will lend money on the overnight market that day. In this context, the term "overnight" means that the cash borrowed is repaid the following day. [1] [2] [3]
In finance, securities lending or stock lending refers to the lending of securities by one party to another.. The terms of the loan will be governed by a "Securities Lending Agreement", [1] which requires that the borrower provides the lender with collateral, in the form of cash or non-cash securities, of value equal to or greater than the loaned securities plus an agreed-upon margin.
Funds are transferred through the purchase and sale of money market instruments—highly liquid short-term debt securities. These instruments are considered cash equivalents since they can be sold in the market easily and at low cost. They are commonly issued in units of at least one million and tend to have maturities of three months or less.
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