Lesson 3 CAPM

• Money Market Instrumen — short term securities (maturing 1yr or less)
• Capital Market Instrument — can be classified as non-negotiable/ non-marketable instrument and negotiable/marketable instrument.
• Cash Management Bills — 91 days 35 days or 42 days
• Treasury Bills — 91 day 182 day and 364 day
• Banker’s acceptance — time draft
• Commercial letter of credit — contractual agreement between a bank
• Negotiable Certificate of deposit — bank issued-time deposits that specifies an interest rate
• Repurchase Agreement — legal contracts
• MMDA — manage by banks or brokerages also called money market account
• MMMF — pool funds
• Money Fund — growth funds, income funds, balance fund, sector fund and global fund
• Certificate of assignment — agreemet that transfer the right of the seller over a security in favor of the buyer
• Certificate of participation — gives the buyer a share in a security that promises to pay a certain sum of money on a fixed date
• Eurodollar certificate of deposit — dollar-denominated
• Non-negotiable instrument — are loans, leases, mortgages and line of credit
• Loan — direct borrowing
• Leases and rent agreement — the owner of the property is called the lessor and line of credit
• Mortgages — using collateral
• Line of credit — bank’s commitment
• Marketable/Negotiable securities — stocks, bonds, notes, long term negotiable and mortgage-backed securities
• Par value shares — shares where the specific money value is shown in the face of the stock certificate
• Cumulative Preferred Shares — entitled to receive all passed dividend in arrears
• Non cumulative preferred shares — not entitled to passed dividends
• Bonds — debt instrument issued by private companies to borrow large sum of money
• Type of Bonds

  1. Corporate bond
  2. Treasury bond
  3. Municipality bond
• mortgage-backed secutrities — neither liquid not suited to trading on secondary market
• Long-term Negotiable Certificate of deposit — bank’s obligation
• Common Stock — right to vote
• Preferred Stock — A type of stock that is issued with a fixed dividend rate and a fixed maturity date.