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CHAPTER 2

CHAPTER 2. Asset Classes & Financial Instruments. What are we going to learn in this chapter ?. The Money Market. What is money market? What trades on money market ? How do the transactions take place ?. The Money Market. C ommercial paper A sset -backed commercial paper

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CHAPTER 2

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  1. CHAPTER 2 AssetClasses & FinancialInstruments

  2. Whatarewegoingtolearn in thischapter?

  3. The Money Market • What is money market? • Whattrades on money market? • How do thetransactionstakeplace?

  4. The Money Market • Commercial paper • Asset-backed commercial paper • A banker’s acceptance • Eurodollars

  5. The Money Market • Repo • The London Interbank Offered Rate (LIBOR) • Riskiness?

  6. The Bond Market • Whattrades on bondmarkets? (Fixed-income capital markets) • Maturities • Yieldtomaturity

  7. The Bond Market • US Bond yields as of Sept. 5, 2013:

  8. The Bond Market • TreasuryInflation-Protected Securities • Federal AgencyDebt • InternationalBonds

  9. The Bond Market • Municipal Bond • Corporate Bonds • MortgagesandMortgage-BackedSecurities

  10. EquitySecurities • Common stocks • One vote • Board vs. management vs. owners • Residualclaim • Limited liability

  11. PreferredStocks • Preferred stock • A fixed amount of income each year • No votingpower • No contractual obligation to pay dividends

  12. END OF CHAPTER

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