ch2 - Markets and Instruments Summary of chapter 2:...

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Slide 2-1 Markets and Instruments Summary of chapter 2: introduce the key features of different security types A. Money Market shorter term Money market instruments and how yields are calculated B. Capital Market longer term Fixed Income Equity Derivative Securities (FINE6800) Market Indices
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Slide 2-2 A. MM Instruments: Types Treasury bills: 3-, 6- and 12-month Certificates of Deposit (CDs) and Guaranteed Investment Certificates (GICs) Commercial Paper (< 12 months) Eurodollar deposits Repurchase Agreements (REPOs) overnight, or term (30 days +) MM instruments are usually in large denominations small investors ?
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Slide 2-3 MM Instruments: Yields Quoted yields are always annualized Simple interest different from effective annual yield how? why? Yields on different money market instruments are not always directly comparable (i.e. Canadian and US t-bills) Factors influencing calculation of yields Use of par value vs. market price 360 vs. 365 days Examples
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Slide 2-4 P = price of the T-bill
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This note was uploaded on 10/21/2010 for the course FINE FINE6200 taught by Professor Mark during the Fall '10 term at York University.

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ch2 - Markets and Instruments Summary of chapter 2:...

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