【正文】 Markets Benefits ? Makes possible an efficient mobilization of funds around the globe. ? Encourages international cooperation among nations. ? Creates a cashmanagement source to aid the financial operations of corporations and governments around the globe. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 36 Benefits and Costs of the Eurocurrency Markets Costs ? The capacity to mobilize massive amounts of funds may contribute to instability in currency values. ? Moary and fiscal policies designed to cure domestic economic problems may not achieve their desired impact. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 37 Money and Capital Markets in Cyberspace ? More information about the various money market instruments can be found at: ? rket/ ? ? ? ? ? ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 38 Chapter Review ? Commercial Paper ? What Is Commercial Paper? ? Types of Commercial Paper ? Structure of the Commercial Paper Market ? Maturities amp。 Disadvantages ? Continuing Innovation in the Paper Market ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 39 Chapter Review ? Federal Agency Securities ? Types of Federal Credit Agencies ? The Roles of Federal Credit Agencies ? Growth of the Agency Market ? Terms on Agency Securities ? The Marketing of Agency Issues ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 40 Chapter Review ?Bankers’ Acceptances ? Why Acceptances Are Used in International Trade ? How Acceptances Arise ? The Growth and Decline of Acceptance Financing ? Acceptance Rates ? Investors in Acceptances ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 41 Chapter Review ? Eurocurrency Deposits ? What is a Eurodollar? ? The Creation of Eurocurrency Deposits ? Eurocurrency Maturities and Risks ? The Supply of Eurocurrency Deposits ? Eurodollars in . Domestic Bank Operations ? Benefits and Costs of the Eurocurrency Markets ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 42 ? Learning Objectives ? ? To examine the characteristics of Treasury bills and the workings of the government securities market. ? To learn how securities dealers operate and why they are so important to the functioning of the money market. ? To understand how banks borrow and lend funds through Federal funds trading and the issuance of CDs. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 43 ? Learning Objectives ? ? To see the impact that the managerial strategy known as liability management has on bank performance and practice in recent years. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 44 Introduction ? The money market supplies the cash needs of shortterm borrowers and provides savers who hold temporary cash surpluses with an interestbearing outlet for their funds. ? In this chapter, we focus on securities dealers and banks, and explore in detail four popular money market instruments – Treasury bills, repurchase agreements, Federal funds, and bank CDs. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 45 . Treasury Bills ? . Treasury bills (Tbills) are direct obligations of the . government that have an original maturity of one year or less. ? Tax revenues or any other source of government funds may be used to repay the holders of these financial instruments. ? They carry great weight in the financial system due to their zero (or nearly zero) default risk, ready marketability, and high liquidity. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 46 Volume of . Treasury Bills Outstanding Data Source: Board of Governors of the Federal Reserve System 1960 $ $ % 1965 1970 1975 1980 1985 1, 1990 2, 1995 3, 2020 2, 2020 2, End of Year Total Volume of Bills Outstanding ($ Billions) Marketable Public Debt of the . ($ Billions) Tbills as a % of the Total Marketable Public Debt ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 47 Types of Treasury Bills ? Regularseries bills are issued routinely every week or month in petitive auctions with original maturities of three months (13 weeks), six months (26 weeks), and one year (52 weeks). ? Irregularseries bills are issued only when the Treasury has a special cash need. These instruments include strip bills and cash management bills. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 48 How Bills Are Sold Source: . Bureau of the Public Debt How Bills Are Sold 11 49 ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 50 Calculating the Yield on Bills ? Tbills do not carry a promised interest rate. Instead, they are sold at a discount from their par or face value. ? Bill yields are determined by the bank discount method, which does not pound interest rates and uses a 360day year for simplicity. ? The bank discount rate (DR) on Tbills = Par value – Purchase price ? 360 . Par value Days to maturity ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 51 Calculating the Yield on Bills ? Because the rates of return on most other debt instruments are not figured in the same way, parisons with other securities cannot be made directly. ? The investment yield or rate (