CHAPTER 3 MONEY MARKETS CHAPTER OVERVIEW

CHAPTER 3
MONEY MARKETS
CHAPTER OVERVIEW
This chapter:
o Defines money markets.
o Explains the roles of money market participants.
o Describes financial instruments traded in money markets and analyzes their pricing.
o Examines recent trends in U.S. money markets.
KEY TERMS
banker’s acceptance immediately available
basis point funds
bid-asked spread interbank market
bill discounting letter of credit
bill of exchange liquid assets
book—entry system money market
call money negotiable certificate of
commercial paper deposit
competitive bid noncompetitive bid
discount house opportunity cost of
discount pricing holding cash
federal funds repurchase agreement
gilt-edged market sterling money markets
government agency Tanshi company
securities tender system
government securities tiered custodial system
dealer Treasury bills