Final answer:
In the repo market, a dealer as a collateral buyer is lending money, where they provide a secured short-term loan with the agreement that the collateral will be repurchased by the seller.
Step-by-step explanation:
In the repo market, when a dealer is a collateral buyer, this means that the dealer is b) lending money. In a typical repurchase agreement, the dealer lends money and receives collateral (usually in the form of government securities). The party that is selling the collateral and agreeing to repurchase it in the future is borrowing money. So, in such a transaction, a collateral buyer is providing a loan secured by collateral, with the expectation that the loan will be repaid and the collateral returned or repurchased.