Chap02 (1) - Chapter 2: Financial Instruments The money...

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1 Ch2: Financial Instruments Chapter 2: Financial Instruments The money market The bond market Equity market Stock and Bond Market Indexes Derivative market
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2 Money Market Instruments Treasury Bills Certificates of Deposit Commercial Paper Bankers’ Acceptances Eurodollars Repos and Reverses Broker’s Calls Federal Funds LIBOR (London Interbank Offer Rate) 2-2
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3 Treasury Bills Issued by Federal Government Denomination Commonly $10,000 Maturity 4, 13, 26, or 52 weeks Liquidity Highly liquid Default risk None Interest type Discount Taxation Federal taxes owed, exempt from state and local taxes 2-3
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4 Figure 2.2 Treasury Bills (T-bills) 2-4
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5 Treasury Bills (T-bills) What is the ask price of highlighted Treasury bill in Fig 2.2? Ch2: Financial Instruments
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6 Figure 2.3 Spreads on CDs and Treasury Bills 2-6
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7 Bond Market US Treasury Bonds and Notes Agency Issues (e.g. FNMA, FHLMC, GNMA) International Bonds Municipal Bonds Corporate Bonds Mortgage-Backed Securities Ch2: Financial Instruments
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8 Treasury notes and bonds 2-8
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Chap02 (1) - Chapter 2: Financial Instruments The money...

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