FIN 305 Lecture 9: FIN305 Class 9
Document Summary
The degree to which securities can easily be liquidated (sold) without a loss of value. The ease, speed, and cost of trading securities. *the more efficient the market, the easier it is for funds to move from surplus units to deficit units. *if funds remain idle, this results in lower growth for the economy and higher unemployment. After initial sale, they have an active secondary market. For return on investment: bought at a discount and at maturity the investor receives the full face value. Used to pay off previous debt, but then the current t-bill reaches debt. It can be traded on the secondary market. Unsecured debt issued by corporations with good credit ratings. Debt securities that have been guaranteed by a bank. Issued by the treasury, government agencies, and corporations to borrow money to finance their operations. Depends on credit worthiness of the issuer (borrower)
