Session2 - AFP Learning System: Treasury Session 2 Module...

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v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 2: Module 1, Chapter 3 - 1 AFP Learning System: Treasury Session 2 Module 1: Introduction to Treasury Management
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v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 2: Module 1, Chapter 3 - 2 Session 2, Module 1: Introduction to Treasury Management Chapter 3: U.S. Financial Environment
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v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 2: Module 1, Chapter 3 - 3 Chapter 3: U.S. Financial Environment—Outline Financial Markets Financial Institutions: Functions and Services Regulatory Agencies Federal Legislation Legislation Governing: Regulation and Supervision Types of Financial Services Offered Geographic Boundaries Consumer Protection Federal Reserve Regulations Uniform Commercial Code (UCC)
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v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 2: Module 1, Chapter 3 - 4 Discussion Question What are the distinctions between money and capital markets? Give examples of each. Answer: Money market instruments generally have one year or less to maturity. They are highly liquid, short-term securities issued by borrowers with excellent credit. Examples: T-bills, CP, repos and BAs Capital market instruments have more than one year to maturity. They are less liquid, long-term securities issued by businesses of various credit quality. Examples: Term loans, equity instruments and bonds
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v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 2: Module 1, Chapter 3 - 5 Securities and Exchange Markets NYSE AMEX NASD NASDAQ (national over- the-counter exchange) Regional exchanges Continuous market with frequent fast trading reducing price volatility Prices subject to changing supply and demand Companies raise capital Regulated environment Primary markets: Debt and equity offered for first time to investors Secondary markets: Previously issued debt and equity are traded by brokers and bankers
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v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 2: Module 1, Chapter 3 - 6 Discussion Question How do you define the term “commercial bank”? Answer: By law, a commercial bank is a financial institution that accepts deposits and makes business loans.
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Session 2: Module 1, Chapter 3 - 7 Deposit Accounts Checking account Interest-bearing for individuals, sole proprietorships, government entities and nonprofits Not interest-bearing for “sub chapter S” and “C” corporations Purposes for holding balances: Transaction balances Compensating balances Correspondent balances Must be held for specified period CDs (under $100K) Jumbo CDs (over $100K) Fully negotiable CDs ($1 mil. blocks)
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This note was uploaded on 02/08/2011 for the course FINANCE 430 taught by Professor Richter during the Spring '11 term at Rutgers.

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Session2 - AFP Learning System: Treasury Session 2 Module...

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