2024-08-01

Notes from http://benjaminkeen.oucreate.com/MB%20Lect02.pdf


:?: What is the difference between money market and capital market?
:!: Money market is a financial market in which short-term debt is traded. Capital market is a financial market in which equities and longer-term debt are traded.

:?: What is “Commercial paper”?
:!: It is short-term debt issued by large banks and well-known companies.

:?: What are “repurchase agreements”?
:!: They are short-term loans (less than 2 weeks) where T-bills serve as collateral.

:?: What are negotiable CDs?
:!: They are CDs in excess of $100,000 that are usually sold to institutional investors.

:?: What are “Federal funds”?
:!: They are typically overnight loans between banks with deposits at the Federal Reserve.

:?: What is the “federal funds rate”?
:!: It is the interest rate that banks charge each other for loans in the federal funds market.



  1. Foreign bonds are sold in a foreign country and denominated in that country’s currency.
  2. Eurobond is a bond denominated in a currency other than that of the country in which it is sold.
  3. Eurodollars are deposits of U.S. dollars in banks outside the U.S.