10-8-09 - 171A Financial Market CH9 Money Market Transfer...

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171A Financial Market CH9 Money Market Transfer finds on a short term basis Characteristics of money market instruments 1. Majority of 1 year or less (When issued) 2. Large denominations (Often $1 million or more) 3. Low default risk Generally: zero coupon instruments Not many could get in to the money market because most people do not have $1 million or more to invest. Who would get in to Money Markets? - Corporations to meet short term funds needs - US treasury to pay for monthly expanses - Park extra cash until better opportunities arrive - Insurance cos / pension funds to meet short term cash outflows - Financial Institutions (banks) with excess resources Investors in money market instruments - Insurance cos / pension funds – park excess cash - Banks short of required reserves - FED buy /sell US treasuries – control moneys (reserves) - Money market funds investment companies that invest in MM instruments - Any institution that wants to invest for short periods i discount yield i investment yield (bank equivalent yield)
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This note was uploaded on 09/08/2010 for the course BUS 171A at San Jose State University .

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10-8-09 - 171A Financial Market CH9 Money Market Transfer...

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