# Repo rate in GBM [closed]

I have seen people use $$\mu = r_f - repo$$ in GBM.

1, Why do we subtract repo from risk free rate? 2, Is the stock price still a martingale?

• May I know what is repo? – Idonknow Dec 19 '19 at 8:22
• Repo rate. In a repo, the dealer sells the underlying security to investors and buys them back shortly afterwards, usually the following day, at a slightly higher price. – StupidMen Dec 20 '19 at 13:00