SMG FE 445 Study Guide - Quiz Guide: Federal Funds Rate, Unsecured Debt, Qst
30 Jun 2020
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The money market: money market is a subsector of the debt market consisting of very short-term debt securities; traded in large denominations, types of money market instruments, treasury bills: Short-term, highly liquid government securities issued at a discount from face value and returning the face amount at maturity; exempt from state taxes. Issued with maturities of 4, 13, 26, or 52 weeks. Traded in the secondary market or directly from treasury. Dealer willing to sell - ( ask * maturity days/360) * fv. Dealer willing to buy - ( bid * maturity days/360) * fv: certificate of deposit (cd): Time deposit with a bank; bank pays interest & principal to depositor only at the end of terms: commercial paper: Large companies often issue these short-term, unsecured debt notes to the public; matures in up to 270 days. Traded in secondary markets very liquid & safe assets: bankers" acceptances:
