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FinancialMarketsChap22 - Financial Markets Chapter 22 Key...

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Financial Markets Chapter 22 Key Terms and Key Points Key Terms: Acceptance financing – The use of a bankers acceptance to finance a commercial transaction Accepting bank – A bank that creates a bankers acceptance Bankers acceptance (BA) – A vehicle created to facilitate commercial trade transactions Certificate of deposit (CD) – A financial asset issued by a bank or thrift that indicates a specified sum of money has been deposited at the issuing depository institution for a specified period of time Effective fed funds rate – The rate most often cited for the fed funds market Eurodollar certificate of deposit – A CD that is denominated in US dollars but is issued outside the United States Floating-rate certificate of deposit – A CD whose interest rate changes periodically in accordance with a predetermined formula that indicates the spread above some index at which the rate will reset periodically Japanese banks – These banks include Japanese city banks, local banks, long-term credit banks, trust banks, and mutual banks
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