money market

Question 1

SONIA

Answer 1

backward looking rate (overnight unsecured transactions negoatiated via a broker or counterparty)

Question 2

TSRR

Answer 2

forward looking rate
> produced by Relative and ICE Bnechmark administration

Question 3

SOFR

Answer 3

cost of borrowing through treasury securities (secured over night financing rate)

Question 4

t-bills maturity

Answer 4

less than a year
issued at discount
no coupon
> min denomination £25k nv

Question 5

uk t-bills based on

Answer 5

actual/365 convention
US 30/360

Question 6

commerical paper (unsecured short dated debt)

Answer 6

issued at a discount
no coupon
7 days to 12mtnhs maturity

Question 7

CD differ form money mrkt instruments

Answer 7

> deposit not loan
pay interest at maturity
1mnth-1yr or 5yrs
remaining maturity of 1 yr or less classed as money mrkt instruments
freely transferable
CD not protected by FSCS like deposit accounts but in US CD protected by FDIC up to $250K

Question 8

BOE uses t-bills to

Answer 8

inject or remove cash from banking system

Question 9

replacement of LIBOR

Answer 9

31 december - entire removal for all currencies and partial removal for one-week and two-month US dollar
30 June - removal from all US settings

Question 10

commercial paper

Answer 10

corporate version of a T-bill

Question 11

government bills

Answer 11

> short-term unsecured debt
issued at a discount and redeemed at par
no coupon