There are two types of money market instruments: [...], and [...]
Answer
interest-bearing instruments (e.g., bank certificates of deposit)
pure discount instruments (e.g., U.S. Treasury bills).
Tags
#reading-7-discounted-cashflows-applications
Question
There are two types of money market instruments: [...], and [...]
Answer
?
Tags
#reading-7-discounted-cashflows-applications
Question
There are two types of money market instruments: [...], and [...]
Answer
interest-bearing instruments (e.g., bank certificates of deposit)
pure discount instruments (e.g., U.S. Treasury bills).
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Subject 4. Different Yield Measures of a U.S. Treasury Bill Money market instruments are low-risk, highly liquid debt instruments with a maturity of one year or less. There are two types of money market instruments: interest-bearing instruments (e.g., bank certificates of deposit), and pure discount instruments (e.g., U.S. Treasury bills).
Pure discount instruments such as T-bills are quoted differently than U.S. government bonds. They are quoted on a bank discount basis rather than on a price basis:
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