Outline-3.2

Outline-3.2 - Ec 173A FINANCIAL MARKETS LECTURE NOTES...

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Ec 173A – FINANCIAL MARKETS LECTURE NOTES Foster, UCSD September 8, 2010 TOPIC 3.2 – FINANCIAL SECURITIES II D. Money Market Instruments 1. Introduction: a) Definition -- Money market. b) Participants. 2. U.S. Treasury Bills: a) T-Bills. b) T-bill listings. 3. Other Money Market Instruments: a) Certificates of Deposit (CDs). b) Federal funds market. c) Commercial Paper (CP). d) Bankers Acceptances. . e) Repurchase Agreements. f) LIBOR. E. Mutual Funds 1. Introduction: a) Investment company. . b) Net Asset Value. c) Regulation. 2. Types of Regulated Funds: a) Unit investment trusts (UIT). b) Closed-ended funds. c) Open-ended funds and ETFs. Treasury Bills ( WSJ Online , 1/16/07) M ATURITY D AYS TO M AT . B ID A SK A SK Y LD Mar 22 07 Jul 12 07 64 176 4.9 6 4.9 5 4.9 5 4.9 4 5.0 6 5.1 3 MONEY RATES ( WSJ , 6/17/2008) Prime Rates Commercial Paper U.S. Canada 5.0 0 4.7 5 30 - 44 day 255 - 270 day 2.2 0 3.1 0 Overnight RPs Libor U.S. 2.2 0 Six month 3.6 6 U.S. Govt Rates Eurodollars Discount Fed. Funds 2.2 5 2.1 0 One month Six month 2.6 0 3.3 0 t t t t N L V NAV - = REGULATED INVESTMENT COMPANIES Closed -End Manage d Open-End (Mutual) MMMF Bond, stock Sector Index UIT ETF 000 , 10 $ 360 1 ; 000 , 10 $ 360 1 × - = × - = n B P price Bid n A P price Ask b a n P r yield Asked a bey 365 1 000 , 10 × - =
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Ec 173A FINANCIAL SECURITIES II p. 2 of 6 Dimensions of Investment Co. Funds Type Portfoli o N s Trading Buy/Sell Fee s Life UIT Fixed Varies Redeem @ NAV Low Expire s Closed-End Manage d Fixed (IPO) Secondary @ P NAV Hig h Open- Ended Manage d Varies Redeem @ NAV Hig h ETF Index Fixed (IPO) Secondary @ P NAV Low 3. Open-Ended Mutual Funds: a) True “mutual funds.” b) Mutual fund costs, fees and taxes. c)
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This note was uploaded on 10/20/2010 for the course ECON 173A taught by Professor Foster during the Fall '09 term at UCSD.

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Outline-3.2 - Ec 173A FINANCIAL MARKETS LECTURE NOTES...

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