FI 301 Study Guide - Midterm Guide: United States Treasury Security, Rjr Nabisco, Money Market Fund
Document Summary
Fi 301 financial insituions: test 2 study guide. *** i tried to highlight what professor clements speciically said would be on the test as well as what he wrote on the board. Money market securiies: maturity of one year or less, used through investment brokers, purpose: short term liquid investment, very low end return (1-2%, relaively risk free, helps to diversify. Issue: 4 week, 13 week, 26 week, and 52 week. Short term debt instrument issued by well known credit worthy irms and is typically unsecured. Minimum denominaion of commercial paper is usually ,000: raings: S&p, modys, fitch: credit risk during credit crisis. 2008 credit crisis lehman brothers: placement irms place commercial paper directly with investors or rely on dealers to sell unsecured higher interest rate, backing commercial paper some backed by assets of the issuer. Ceriicates used by large commercial banks and other depository insituions as a short term source of funds: repurchase agreements.
