Overview of the Money Market

Flashcards covering key concepts related to the overview of the money market.

Money Market

A market for short-term debt instruments, typically with maturities under 120 days.

Liquidity

The ease with which an asset can be converted into cash without affecting its market price.

U.S. Treasury Bills

Short-term government securities with maturities up to one year, considered free of default risk.

Agency Debt

Debt issued by government-owned agencies that is guaranteed by the government.

Fed Funds

Short-term loans between banks, typically one day in duration, mainly used by depository institutions.

Repurchase Agreements (Repo)

A transaction where a security is sold with the agreement to repurchase it later at a higher price.

Commercial Paper

Unsecured corporate debt that typically has maturities from 1 to 270 days.

Negotiable CDs

Large time deposits that can be traded before maturity, usually above $100,000.

Open-market Operations

Buying and selling of money market securities by the Federal Reserve to implement monetary policy.