FIN 327 - Lecture 3 Asset Classes Overview and Money Market Instruments

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Last updated 5:10 PM on 7/14/26
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11 Terms

1
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What are the main types of financial assets?

  • money market instruments

  • bond market instruments

  • equity market instruments

  • market indexes

  • mutual funds

2
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money market instruments

liquid; safe; short-term, low return

3
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bond market instruments

fixed income; default risk

4
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equity market instruments

higher risk; higher return

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derivative markets

highest risk; sophisticated

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What are the main money market?

  • treasury bills

  • commercial paper

  • money market funds

7
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What are the highlights of Treasury Bills?

  • issued by gov’t

  • up to 1 year maturity

  • highly liquid = low risk

  • only pay federal taxes

8
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What is commercial paper used for?

used to finance immediate operating needs; cash management; short on cash

9
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commercial paper highlights

  • <1-2 months

  • discount

  • low risk = low return

10
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What are treasury bills used for?

its a safe way to earn interest

11
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What are the managers job in a money market mutual fund?

they make sure the price is stable (make sure you get the money tomorrow)