Explain how Repo 105 worked by showing the effect of a 50 billion repo 105 transaction. Where does the name come from? Why would Lehman have an incentive to undertake the transaction? What is the most compelling reason as to why Lehman should have disclosed its use of Repo 105 to investors?

Answer rating: 100% (QA)

Repo 105 was a type of accounting maneuver used by Lehman Brothers to temporarily move assets off its balance sheet in order to make its financial pos... View the full answer