BU393 Chapter Notes - Chapter 1: Commercial Paper
Document Summary
Money market: the market for bonds with maturity of less than 1 year. These bonds are all zero coupon bonds and include bankers" acceptances, commercial paper, and government t-bills. Highly liquid: money market mutual funds pooling of investor money that is professionally managed. Investors have shares in this fund: traded in large denominations. Capital market: market for long-term securities with original maturity greater than 1 year. Main securities are bonds and stocks issued by companies and governments. Primary market: market where securities are traded for the first time and where initial offerings to the public are made. Ipos are intermediated by investment banks. ( it purchases securities from corporate and government issuers and resells to public in the primary market) Secondary market: market for trading securities after they have been issued. Accuarte prices and liquidity are important: auction trades in 1 physical/virtual location.
