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An individual may invest in the ______ market by purchasing a ______ market mutual fund, buying a Treasury bill, or opening a ______ market account at a bank. Money market investments are characterized by safety and liquidity, provides financing to local & international traders. The central bank can perform its policy-making function efficiently. Functions of Money Market include growth of industries and commercial banks self-sufficiency. Types of Money Market Instruments include Treasury Bills - safest instruments since they are issued with a full guarantee by the government and sold at a discount to their face value. Money Market Accounts are a type of savings account. They pay interest, but some issuers offer account holders limited rights to occasionally withdraw ______ or write checks against the account. Types of Money Market Instruments also include Certificate of Deposit (CD). Most CDs offer a fixed maturity date and interest rate, attracting a penalty for withdrawing prior to the time of maturity. Commercial Paper is an unsecured, short-term debt instrument issued by corporations. Types of Money Market Instruments also include Banker's Acceptances - a short-term loan that is guaranteed by a bank and used extensively in foreign trade. Repurchase Agreement is a form of short-term borrowing for dealers in government securities. A dealer sells government securities to an investor, usually overnight, and buys them back the following day at a slightly higher price.
An individual may invest in the ______ market by purchasing a ______ market mutual fund, buying a Treasury bill, or opening a ______ market account at a bank. Money market investments are characterized by safety and liquidity, provides financing to local & international traders. The central bank can perform its policy-making function efficiently. Functions of Money Market include growth of industries and commercial banks self-sufficiency. Types of Money Market Instruments include Treasury Bills - safest instruments since they are issued with a full guarantee by the government and sold at a discount to their face value. Money Market Accounts are a type of savings account. They pay interest, but some issuers offer account holders limited rights to occasionally withdraw ______ or write checks against the account. Types of Money Market Instruments also include Certificate of Deposit (CD). Most CDs offer a fixed maturity date and interest rate, attracting a penalty for withdrawing prior to the time of maturity. Commercial Paper is an unsecured, short-term debt instrument issued by corporations. Types of Money Market Instruments also include Banker's Acceptances - a short-term loan that is guaranteed by a bank and used extensively in foreign trade. Repurchase Agreement is a form of short-term borrowing for dealers in government securities. A dealer sells government securities to an investor, usually overnight, and buys them back the following day at a slightly higher price.
money
An individual may invest in the ______ market by purchasing a money market mutual fund, buying a Treasury bill, or opening a money market account at a bank.
An individual may invest in the ______ market by purchasing a money market mutual fund, buying a Treasury bill, or opening a money market account at a bank.
money
Money market investments are characterized by safety and liquidity, provides financing to local & international traders. The central bank can perform its policy-making function efficiently. Functions of ______ Market include growth of industries and commercial banks self-sufficiency.
Money market investments are characterized by safety and liquidity, provides financing to local & international traders. The central bank can perform its policy-making function efficiently. Functions of ______ Market include growth of industries and commercial banks self-sufficiency.
money
Types of Money Market Instruments include Treasury Bills - safest instruments since they are issued with a full guarantee by the government and sold at a discount to their face value. Money Market Accounts are a type of savings account. They pay interest, but some issuers offer account holders limited rights to occasionally withdraw ______ or write checks against the account. Types of Money Market Instruments also include Certificate of Deposit (CD). Most CDs offer a fixed maturity date and interest rate, attracting a penalty for withdrawing prior to the time of maturity. Commercial Paper is an unsecured, short-term debt instrument issued by corporations. Types of Money Market Instruments also include Banker's Acceptances - a short-term loan that is guaranteed by a bank and used extensively in foreign trade. Repurchase Agreement is a form of short-term borrowing for dealers in government securities. A dealer sells government securities to an investor, usually overnight, and buys them back the following day at a slightly higher price.
Types of Money Market Instruments include Treasury Bills - safest instruments since they are issued with a full guarantee by the government and sold at a discount to their face value. Money Market Accounts are a type of savings account. They pay interest, but some issuers offer account holders limited rights to occasionally withdraw ______ or write checks against the account. Types of Money Market Instruments also include Certificate of Deposit (CD). Most CDs offer a fixed maturity date and interest rate, attracting a penalty for withdrawing prior to the time of maturity. Commercial Paper is an unsecured, short-term debt instrument issued by corporations. Types of Money Market Instruments also include Banker's Acceptances - a short-term loan that is guaranteed by a bank and used extensively in foreign trade. Repurchase Agreement is a form of short-term borrowing for dealers in government securities. A dealer sells government securities to an investor, usually overnight, and buys them back the following day at a slightly higher price.
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An individual may invest in the money market by purchasing a ______ market mutual fund, buying a Treasury bill, or opening a money market account at a bank.
An individual may invest in the money market by purchasing a ______ market mutual fund, buying a Treasury bill, or opening a money market account at a bank.
Signup and view all the answers
Types of Money Market Instruments include Treasury Bills - safest instruments since they are issued with a full guarantee by the government and sold at a discount to their face value. Money Market Accounts are a type of savings account. They pay interest, but some issuers offer account holders limited rights to occasionally withdraw ______ or write checks against the account.
Types of Money Market Instruments include Treasury Bills - safest instruments since they are issued with a full guarantee by the government and sold at a discount to their face value. Money Market Accounts are a type of savings account. They pay interest, but some issuers offer account holders limited rights to occasionally withdraw ______ or write checks against the account.
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Commercial Paper is an unsecured, short-term debt instrument issued by ______.
Commercial Paper is an unsecured, short-term debt instrument issued by ______.
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Types of Money Market Instruments also include Banker's Acceptances - a short-term loan that is guaranteed by a ______ and used extensively in foreign trade.
Types of Money Market Instruments also include Banker's Acceptances - a short-term loan that is guaranteed by a ______ and used extensively in foreign trade.
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Repurchase Agreement is a form of short-term borrowing for dealers in government securities. A dealer sells government securities to an investor, usually overnight, and buys them back the following day at a slightly higher ______.
Repurchase Agreement is a form of short-term borrowing for dealers in government securities. A dealer sells government securities to an investor, usually overnight, and buys them back the following day at a slightly higher ______.
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Most CDs offer a fixed maturity date and interest rate, attracting a penalty for withdrawing prior to the time of ______.
Most CDs offer a fixed maturity date and interest rate, attracting a penalty for withdrawing prior to the time of ______.
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Money Market Accounts are a type of savings account. They pay interest, but some issuers offer account holders limited rights to occasionally withdraw money or write ______ against the account.
Money Market Accounts are a type of savings account. They pay interest, but some issuers offer account holders limited rights to occasionally withdraw money or write ______ against the account.
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Study Notes
Debt Securities
- Debt securities are negotiable financial instruments that represent a debt owed by an issuer to an investor, with legal ownership readily transferrable between parties before maturity.
- They have a defined issue date, maturity date, coupon rate, and face value, providing regular payments of interest and guaranteed repayment of principal.
Features of Debt Securities
- Issue date and issue price
- Maturity date
- Yield-to-Maturity (YTM)
- Return on capital
- Regular stream of income from interest payments
Why Invest in Debt Securities?
- Means for diversification
- Fixed rate of return
- Generally regarded as holding less risk
Bonds
- A contractual agreement between the borrower and lender to pay an agreed-upon rate of interest on the principal over a period of time and then repay the principal at maturity.
- Can be issued by the government and non-government entities.
- Have maturity dates at which point the principal amount must be paid back in full or risk default.
Types of Bonds
- Corporate Bonds: commonly longer-term debt instruments with a maturity of at least one year
- Government Bonds: nationally-issued government bonds or sovereign bonds
- Municipal Bonds: locally issued by states, cities, special-purpose districts, public utility districts, school districts, publicly owned airports and seaports, and other government-owned entities
- Mortgage-Backed Bonds (MBS): consist of pooled mortgages on real estate properties
- Emerging Market Bonds: governments and companies in emerging market economies issue bonds that provide growth opportunities but with greater risk
Characteristics of Bonds
- Face value: the money amount the bond will be worth at maturity
- Coupon rate: the rate of interest the bond issuer will pay on the face value of the bond, expressed as a percentage
- Coupon dates: the dates on which the bond issuer will make interest payment
- Maturity date: the date issuer will pay the bondholder the face value of the bond
- Issue Price: the price at which the bond issuer originally sells the bonds
Money Market
- Involves the purchase and sale of large volumes of very short-term debt products, such as overnight reserves or commercial paper.
- Provides financing to local and international traders, enabling central banks to perform their policy-making function efficiently
- Functions include growth of industries, commercial banks' self-sufficiency
Money Market Instruments
- Treasury Bills: safest instruments since they are issued with a full guarantee by the government, sold at a discount to their face value
- Money Market Accounts: a type of savings account that pays interest, with some issuers offering limited rights to occasionally withdraw money or write checks against the account
- Certificate of Deposit (CD): offers a fixed maturity date and interest rate, attracting a penalty for withdrawing prior to the time of maturity
- Commercial Paper: an unsecured, short-term debt instrument issued by corporations
- Banker's Acceptances: a short-term loan that is guaranteed by a bank, used extensively in foreign trade
- Repurchase Agreement: a form of short-term borrowing for dealers in government securities, where a dealer sells government securities to an investor and buys them back the following day at a slightly higher price
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Description
Learn about the basic definitions of debt securities, including their structure, negotiability, issue date, maturity date, coupon rate, and face value. Understand how these negotiable financial instruments represent a debt owed by an issuer to an investor.
