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Negotiable
Financial Instruments > This page
Types
of Financial Instruments
Money
Market Instruments
Treasury bills
Certificates of deposit
Commercial Paper (Member
section)
Bankers Acceptances/Letters of credit (Member
section)
Eurodollars (Member
section)
Repurchase Agreements (RPs) and Reverse RPs (Member
section)
Bank Guarantees (Member
section)
Bonds (Member section)
Corporate bonds (Member
section)
The Money Market Instruments
(Member section)
Money
Market Instruments (Click for
more)
The major purpose of financial markets is to transfer funds from lenders
to borrowers. Financial market participants commonly distinguish between
the "capital market"
and the "money market".
The money market refer
to borrowing and lending for periods of a year or less.
Treasury
bills (Click for more)
Treasury bills are short-term securities
issued by the U.S. Treasury. The Treasury sells bills at regularly scheduled
auctions to refinance maEagle Tradersg issues. It also helps to
finance current federal deficits. They further sell bills on an irregular
basis to smooth out the uneven flow of revenues from corporate and individual
tax receipts.
Certificates
of deposit (Click for more)
A certificate of deposit
is a document evidencing a time deposit placed with a depository institution.
The following information appears on the certificate:
- the amount of the deposit;
- the date on which it matures;
- the interest rate; and
- the method under which the interest is calculated.
Large negotiable CDs are generally issued in denominations of $1
million or more.
Commercial
Paper (Click for more)
Commercial paper is a short-term
unsecured promissory note issued by corporations and foreign governments.
It is a low-cost alternative to bank loans, for many large, credit worthy
issuers. Issuers are able to efficiently raise large amounts
of funds quickly and without expensive Securities and Exchange Commission
(SEC) registration. They sell paper, either directly or through
independent dealers, to a large .............
More information is provided in the Member Area
Recommended further reading:
Commercial
Paper
Bonds
Corporate Debt Securities
Commercial Paper Outstandings Federal
Reserve
Bankers Acceptances
Guarantees
Books
on Financial Instruments
Online
book:
Understanding
Financial Markets & Instruments
Chapter
1: Introduction to Financial Markets
Chapter 2: The Equity
Market
Chapter 3: The Money
Market and Instruments
Chapter 4: The Capital
Market and Instruments
Chapter 5: The Foreign
! Exchange Market
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