6 as explained in chapter 1 the money market results

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Unformatted text preview: yields as a consequence of their low risk, and (2) nongovernment issues, which have slightly higher yields than government issues with similar maturities because of the slightly higher risk associated with them. Table 14.5 summarizes the key features and recent (May 1, 2002) yields for popular marketable securities. 6. As explained in Chapter 1, the money market results from a financial relationship between the suppliers and demanders of short-term funds, that is, marketable securities. CHAPTER 14 TABLE 14.5 625 Working Capital and Current Assets Management Features and Recent Yields on Popular Marketable Securitiesa Security Issuer Description Initial maturity Risk and return Yield on May 1, 2002b Government Issues Treasury bills U.S. Treasury Issued weekly at auction; sold at a discount; strong secondary market 91 and 182 days Lowest, virtually risk-free 1.73% Treasury notes U.S. Treasury Stated interest rate; interest paid semiannually; strong secondary market 1 to 10 years Low, but slightly higher than U.S. Treasury bills 1.79% Federal agency issues Agencies of federal government Not an obligation of U.S. Treasury; strong secondary market 9 months to 30 years Slig...
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This document was uploaded on 01/19/2014.

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