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18.86. Reverse Repurchase Agreements Risk

Reverse repurchase agreements involve the risks that the interest income earned on the investment of the proceeds will be less than the interest expense of the Investment Compartment, that the market value of the securities sold by the Investment Compartment may decline below the price at which the Investment Compartment is obligated to repurchase the securities and that the securities may not be returned to the Investment Compartment. There is no assurance that reverse repurchase agreements can be successfully employed.