FinMktHW4 - Financial Markets & Institutions Module 4...

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Module 4 Homework Page 155: 1) The 3 characteristics common to money market securities are Liquidity, Discount Pricing and Safety. 6) The Treasury announces details of the issue (amount, maturity date, etc). They then receive competitive and non-competitive bids. At the end of the auction they accept non-competitive bids that follow the rules of the auction, and accept the competitive bids in ascending order of yields. Once they reach the offering amount of accepted bids the auction is complete. 10) A) $99.20 B) $98.68 14) Federal Funds are funds that are deposited from commercial banks at Federal Reserve banks. It enables banks to borrow reserves from banks with excess reserves to fulfill their reserve requirements. Federal funds purchased would fall under liabilities in its balance sheet, where as Federal funds sold would fall under assets in the balance sheet. 20) The issuers obtain a rating because they have to be rated by a recognized credit rating agency to assure they’re commercial paper can be issued appropriately and proving to possible consumers that the rating has not fallen or is different from what was issued on the paper. 25)
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This note was uploaded on 07/12/2011 for the course BUS 101 taught by Professor Noname during the Spring '11 term at Albany State University.

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FinMktHW4 - Financial Markets & Institutions Module 4...

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