Financial Management Environment (5) Flashcards
Money market deposits (interest-bearing or discount)?
Interest-bearing
Certificates of deposit (interest-bearing or discount)?
Interest=bearing
Repurchase agreements (interest-bearing or discount)?
Interest-bearing
Treasury bill (interest-bearing or discount)?
Discount
Bank bills or acceptance credits (interest-bearing or discount)?
Discount
Commercial paper (interest-bearing or discount)?
Discount
Bill of exchange (interest-bearing or discount)?
Discount
What are money market deposits?
Very short-term loans normally between banks
What are certificates of deposit?
Certigficate of receipt for funds deposited at a financial institution for a specified term and paying interest (coupon rate) at a specified rate on a specified date
What are repurchase agreements?
An agreement between two parties under which one party agrees to sell a financial instrument on an agreed date for an agreed price and simulataneously buy back isntrument at a later date for a higher price
What is a treasury bill?
Debt instruments issued by givernment with maturities ranging from one month to one year
What is a bank bill?
Sold by and guaranteed by a bank on behalf of a comapny for up to 180 days of credit
What are commercial paper?
Short-term unsecured corporate debt with maturity up to 270 days. Issued by organisations with good credit ratings
What is bill of exchange/
An IOU signed by a customer which can be sold on the market raise and only used for significant transactions
What are capital markets for?
Raising long-term finance
