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FINANCIAL MARKET COURSES

Money Market Securities – An Introduction

Money market instruments are a very important subset of the capital markets. They offer short-term investors liquidity and (usually) high credit quality, but at a lower yield than is available in the bank deposit market. There are interest bearing and discount instruments to suit varied requirements.

 

This course describes the essential features of Treasury bills, certificates of deposit, commercial paper and bankers’ acceptances. We will examine the nature of these products, their features, how they are used, and their usefulness in today's markets.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Recognize how treasury bills carry the least risk of all money market instruments

    Classify commercial paper as being an instrument that is issued at a discount and name the type of facility used to back up short-term commercial paper

    Identify the concerns of investors in certificates of deposit

    Interpret the significance of bankers’ acceptances being backed by trade receivables

  • COURSE OUTLINE

    Topic 1: Government (Treasury) Bills

    Government Borrowings

    Government (Treasury) Bills

    Need for Treasury Bills

    Maturity Dates of Treasury Bills

    Auctioning Treasury Bills

    o US Treasury Bills

    o UK Treasury Bills

    Primary & Secondary Markets

    Topic 2: Commercial Paper

    Commercial Paper (CP): Definition

    Features of CP

    Buyers of CP

    Issuers of CP

    Issuing CP

    Asset-Backed Commercial Paper (ABCP)

    Parties in an ABCP Program

    Issuing of ABCP

    ABCO Conduits

    o Single-Seller Conduits

    o Multi-Seller Conduits

    o Security-Backed Conduits

    Credit Ratings

    Certificates of deposit

    Bankers’ acceptances

    Topic 3: Certificates of Deposit

    Overview of Certificates of Deposit

    Bid & Offer Prices

    Types of CDs

    Retail Vs. Negotiable CDs

    Credit Issues

    Topic 4: Bankers’ Acceptances

    Overview of Bankers’ Acceptances

    Secondary Market for Bankers’ Acceptances

    Issuing Bankers’ Acceptances

    Features of Bankers' Acceptances

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    60 Minutes

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