Abstract: This chapter reviews the cash instruments traded in the money market as well as the two main money market derivatives: interest-rate futures and forward-rate agreements. The money market is traditionally defined as the market for instruments maturing in one year or less, frequently the money market desks of banks trade instruments with maturities of up to two years, both cash and off balance-sheet. The cash instruments traded in the money market include the following: Treasury bill, time deposit, certificate of deposit, commercial paper (CP), bankers acceptance, and bill of exchange. A Treasury bill is used by sovereign governments to raise short-term funds, while certificates of deposit (CDs) are used by banks to raise finance. The other instruments are used by corporates and occasionally banks. Each instrument represents an obligation on the borrower to repay the amount borrowed on the maturity date together with interest if this applies.
Publication Year: 2010
Publication Date: 2010-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
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