COMMERCE 3FB3 Lecture Notes - Lecture 2: Guaranteed Investment Certificate, United States Treasury Security, Unsecured Debt
7 May 2017
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Major classes of financial assets or securities: debt, money market instruments, bonds, common stock, preferred stock, derivative securities, options, futures. Markets & instruments: money market, short-term debt securities, treasury bills, etc, capital market, bonds (government and corporate, equities (common and preferred, derivatives (options, futures, swaps) The money market: money market, a subsector of the fixed-income market, consists of very-short-term debt securities, trade in large denominations. Instruments: treasury bills, the most marketable of all canadian money market instruments, the government raises money by selling bills to the public. Calculating money market yields: bond equivalent yield (bey, simple interest annualized rate, effective annual yield, compound interest annualized rate, bank discount yield, as bey but using 360 days and par value, the quoted yield for us t-bills. Consider a ,000 par value t-bill sold at with a maturity of a maturity of a half-year, or.
