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In this tutorial, David explains repurchase agreements, or repo transactions, which are secured loans. The borrower (or buyer) sells collateral, such as a bond, to the lender (or seller) in exchange for cash. For example, if the collateral is valued at $100, the borrower receives $100 while promising to repurchase the collateral shortly after, often as soon as the next day. This transaction effectively locks in a forward price for the collateral. On the following day, the borrower repurchases the collateral by paying the previously agreed-upon price. This summary captures the essence of the repo transaction process discussed in the video.