金融市场与机构Madura第九版教师手册Ch06.pdf

Chapter 6 Money Markets Outline Money Market Securities Treasury Bills Commercial Paper Negotiable Certificates of Deposit (NCDs) Repurchase Agreements Federal Funds Banker’s Acceptances Institutional Use of Money Markets Valuation of Money Market Securities Impact of Changes in Credit Risk Interest Rate Risk Globalization of Money Markets Eurodollar Securities © 2010 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part. 2 Chapter 6: Money Markets Key Concepts 1. Explain the main role of money market securities. 2. Identify the more popular money market securities, and elaborate where necessary. 3. Explain how financial institutions participate in money markets. POINT/COUNTER-POINT: Should Firms Invest in Money Market Securities? POINT: No. Firms are supposed to use money in a manner that generates an adequate return to shareholders. Money market securities provide a return that is less than that required by shareholders. Thus, firms should not be using shareholder funds to invest in money market securities. If firms need liquidity, they can rely on the money markets for short-term borrowing. COUNTER-POINT: Yes. Firms need money markets for liquidity. If they do not hold any money market securities, they will frequently be forced to borrow to cover unanticipated cash needs. The lenders may charge higher risk premiums when lending so frequently to these firms. WHO IS CORRECT? Use the Internet to learn more about this issue. Offer your own opinion on this issue. ANSWER: Firms should not hold an excessive amount of money in the form of money market securities. But they should invest in money market securities so that they have access to funds before being forced to re