Provide method for investors to keep excess 1 provide

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Unformatted text preview: od for investors to keep excess 1. Provide cash balances working cash 2. Provide a method for limiting interest rate risk 3. Provide an additional investment vehicle for Provide All Rights Dr David P Echevarria 6 portfolios portfolios Reserved Reserved FOREIGN FINANCIAL MARKETS FOREIGN A. Eurodollar Deposits and Euro notes A. 1. Foreign deposits denominated in dollars 2. Notes issued in European financial markets Notes but denominated in dollars but B. Euro-commercial Paper 1. Potential hedge vehicle 2. Dealers provide a secondary market C. Lack of Regulatory Oversight 1. Increased risks 2. Source of competitive edge for foreign banks All Rights Reserved Reserved Dr David P Echevarria 7 http://www.economagic.com/e m-cgi/data.exe/fedbog/ed3m 10.00 8.00 6.00 4.00 2.00 0.00 19 90 19 92 19 93 19 94 19 96 19 97 19 98 20 00 20 01 20 02 20 04 20 05 20 06 20 08 20 09 Ra t e % Eurodollar Rate (Monthly) Year All Rights Reserved Reserved Dr David P Echevarria 8 Market Rate Comparisons Eurodollar Rate (Monthly) 12.00 EuroD% FedFunds Prime...
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This document was uploaded on 02/11/2014.

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