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.