CH05 - 5-1Chapter 5Money Market Instruments5-2Money Market...

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Unformatted text preview: 5-1Chapter 5Money Market Instruments5-2Money Market InstrumentsUnited States treasury billsFederal fundsRepurchase agreementsCommercial paperPrime rateBankers acceptancesBank certificates of depositEurocurrency certificates of depositMoney market funds5-3Repurchase AgreementsPoints in time2:00 p.m.5:00 p.m.9:00 a.m.January 15 January 15 January 16Dealer buysDealer sellsDealer repurchases$450 million$400 million$400 million andof bondsof bonds as pays overnightrepointerestFinancing Needs of a Bond Dealer5-4US money marketBankers AcceptancesUS bankUS retailerPays in futureBankers acceptance$$$GoodsForeign producerForeign bank5-5BankBorrowersIndividuals and businessesLarge CDs7.5%Loans$$$Deposit6.9%Money market mutual fundsMoney Market FundsFee = 0.10%Commercialpaper7%5%Deposit$$5-6Quoting rates on a discount basisLet the number of days until maturity be t....
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This note was uploaded on 06/07/2011 for the course FIN 4243 taught by Professor Dudley during the Spring '08 term at University of Florida.

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CH05 - 5-1Chapter 5Money Market Instruments5-2Money Market...

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