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Demystifying Financial Instruments: T-Bills, CDs, and More
Chapter 2, Problem 6(choose chapter or problem)
Describe who issues each of the following money market instruments:
a. Treasury bills
b. Certificates of deposit
c. Commercial paper
d. Repurchase agreement
e. Fed funds
Questions & Answers
QUESTION:
Describe who issues each of the following money market instruments:
a. Treasury bills
b. Certificates of deposit
c. Commercial paper
d. Repurchase agreement
e. Fed funds
ANSWER:Step 1 of 5
Different entities issue the following money market instruments:
a. Treasury bills (T-bills): Treasury bills are issued by the government, specifically the U.S. Department of the Treasury. These short-term debt securities have one-year or fewer maturities and are typically issued to finance government operations or meet short-term funding needs. T-bills are considered low-risk investments because the full faith and credit of the U.S. government backs them.
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Demystifying Financial Instruments: T-Bills, CDs, and More
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Explore essential financial instruments without diving into complexity. From Treasury bills to Federal funds, uncover the basics of short-term debt and money market tools that drive economic stability.