Last Updated on 2020-02-22 by Admin
Notes
- Short term (< 1 year).
- Safest form of investment.
- Low risk / low return.
- Marketable.
- Highly liquid.
Instruments
- Bankers Acceptances – Company issued paper guaranteed by a bank.
- Brokers’ Calls – Rate at which brokers borrow from the bank.
- Certificates of Deposit (CDs) – Bank issued.
- Commercial Paper (CP) – Company issued.
- Eurodollars – Dollar denominated deposits outside the US (Euro = outside).
- Fed Funds – Deposits by banks with the Federal Reserve / Central Banks. Loans between banks (overnight).
- London Inter-Bank Offered Rate (LIBOR).
- Repurchase Agreements (Repos/Reverse Repos) – Short term loans (overnight).
- US Treasury Bills (T-Bills) – Government issued.
