金融市场与机构Money MarketsPPT.ppt

CHAPTER 6 Money Markets Chapter Objectives Provide a background on money market securities Explain how institutional investors use money markets Explain the globalization of money markets 1. Money Market Securities Maturity of a year or less Debt securities issued by corporations and governments that need short-term funds Large primary market focus Purchased by corporations and financial institutions Secondary market for securities Provide liquidity to investors 1. Money Market Securities Treasury Bills Commercial paper Negotiable certificates of deposits Repurchase agreements Federal funds Banker’s acceptances 1.1 Money Market Securities Treasury bills Issued to meet the short-term needs of the U.S. government Sold weekly through an auction and one-year T-bills are issued on a monthly basis Attractive to investors Minimal default risk and low inflation risk Excellent liquidity for investors (deep market and liquid market) Short-term maturity Very good secondary market (government securities dealers) Money Market Securities Estimating T-bill yield No coupon payments Par or face value received at maturity Yield at issue is the difference between the selling price and par or face value adjusted for time If sold prior to maturity in secondary market Yield based on the difference between price paid for T-bill and selling price adjusted for time Money Market Securities Calculating T-Bill Annualized Yield YT ? SP – PP PP 365 n YT = The annualized yield from investing in a T-bill SP = Selling price PP = Purchase price n = number of days of the investment (holding period) = Money Market Securities T-bill discount for a newly issued security Par – PP Par 360 n T-bill discount = percent discount of the purchase price from par Par = Face value of the T-bills at maturity PP = Purchase price n = number of days to maturity T-bill discount = ? 1.2 Money Market Securities Short-term debt instrument Alternative to bank loan (finance inventory and accounts rec