Money Market Debt/Structured Products

Question 1

Money Market Debt definition

Answer 1

debt obligation that matures in 1 year or less

Question 2

What Treasury security is considered a money market instrument?

Answer 2

Treasury Bills due to low maturity; also any Treasury security that only has 1 year left till maturity

Question 3

What corporate security is considered a money market instrument?

Answer 3

Commerical paper

Question 4

BA

Answer 4

Bankers Acceptance - bearer security issued by a bank to help with import/export

Question 5

Negotiable Certificate of Deposit

Answer 5

Tradable CDs

Question 6

Repurchase Agreement

Answer 6

dealer sells security to another dealer with agreement to buy them back at a later date; also called a repo

Question 7

Reverse Repurchase agreement

Answer 7

Usually used by the Fed to tighten money supply. Fed sells paper to dealers

Question 8

ETN

Answer 8

Exchange Traded Note; growth linked to underlying index

Question 9

Reverse Convertible Note

Answer 9

note linked to price movements of a stock; if price of stock falls below “Knock in” price, issuer gives buyer shares instead of par

Question 10

ARS

Answer 10

Auction Rate Security; interest rate reset at weekly auction

Question 11

CDS

Answer 11

Credit Default Swap - “insurance” for loans