[经济学]AISE_FIM7e_ch09.pptVIP

Chapter 9 U.S. Money Markets Chapter Outline U.S. money market securities Institutional use of money markets Valuation of money market securities Risk of money market securities Interaction among money market yields Globalization of money markets U.S. Money Market Securities U.S. money market securities: Have maturities within one year Are issued by corporations and governments to obtain short-term funds Are commonly purchased by corporations and government agencies that have funds available for a short-term period Provide liquidity to investors U.S. Money Market Securities (cont’d) Treasury bills: Are issued by the U.S. Treasury Are sold weekly through an auction Have a par value of $1,000 Are attractive to investors because they are backed by the federal government and are free of default risk Are liquid Can be sold in the secondary market through government security dealers U.S. Money Market Securities (cont’d) Treasury bills (cont’d) Investors in Treasury bills Depository institutions because T-bills can be easily liquidated Other financial institutions in case cash outflows exceed cash inflows Individuals with substantial savings for liquidity purposes Corporations to have easy access to funding for unanticipated expenses U.S. Money Market Securities (cont’d) Treasury bills (cont’d) Pricing Treasury bills The price is dependent on the investor’s required rate of return: Treasury bills do not pay interest To price a T-bill with a maturity less than one year, the annualized return can be reduced by the fraction of the year in which funds would be invested Computing the Price of a Treasury Bill  A one-year Treasury bill has a par value of $10,000. Investors require a return of 8 percent on the T-bill. What is the price investors would be willing to pay for this T-bill? U.S. Money Market Securities (cont’d) Treasury bills (cont’d) Treasury bill auction Investors submit bids on T-bill applications for the maturity of their choice Applications can be o