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money market instruments
banker's acceptances, commercial paper, federal funds, negotiable certificates of deposit, repurchase agreements, treasury bills
Short-term debt securities issued most commonly by the federal government.
Certificates of Deposit
Time deposit with bank - fixed term issue in denominations larger than $100,000. Not payable on demand
an unsecured short-term promissory note issued by a corporation to raise short-term cash, often to finance working capital requirements; generally sold with maturities of 1 to 270 days (if maturity is greater than 270 d…
a time draft payable to a seller of goods with payment guaranteed by a bank; arise from international trade transactions and are used to finance trade in goods that have yet to be shipped …
USD held on deposit in foreign banks and lent by those banks to anyone seeking them. Eurodollar CDs have higher rates of return than treasuries and domestic CDs.
the London InterBank Offered Rate is the interest rate offered by the best London banks on deposits of other large, very creditworthy banks
an agreement involving the sale of securities by one party to another with a promise to repurchase the securities at a specified price on a specified date; essentially a collateralized fed fund loan with collat…
a financial market in which longer term debt and equity instruments are traded. (generally those with maturity of one year or greater)
US Treasury Bonds and Notes
debt obligations of the federal government with original maturities of one year or more
Interest bearing debt issued by state or local governments to finance operating or capital costs.
Debt obligations issued by corporations as an alternative to offering equity ownership by issuing stock.
either an ownership claim in a pool of mortgages or an obligation that is secured by such a pool
Reverse Repurchase Agreement
mirrors repurchase agreement. A contract in which the vendor of a security agrees to repurchase it from the buyer at an agreed price
funds in the accounts of commercial banks at the Federal Reserve Bank
Federal Agency Debt
some government agencies issue their own securities to finance their activities
long term bond that isn't secured by mortgage on a property
give the firm the option to repurchase the bond from the holder at a stipulated call price
a debt security that can be converted into a firm's stock at a specified price.
relate the maturity of a treasury issue to the yield to maturity of the treasury issue