Exam 10: Factors Affecting the Volume of CDs

The heart of the international money market is the Eurocurrency market.

Treasury bills tend to carry the lowest rate among money market instruments because they have zero default risk and minimal market risk.

Money market securities normally are considered an effective hedge against inflation due to their superior liquidity.

The risk that a security's price may fall, subjecting the investor to a capital loss is known as:

Why did the volume of Treasury bills grow rapidly in earlier decades and then during the most recent decade level off and then decline?

Federal funds, like their global counterpart Eurodollar deposits, are typically traded on a 30-60-90 day basis.

While the recent trend was a decline in the total marketable debt of the U.S. government T-bills, the resent events of 2007-2009 has lead to its increase. The current percentage is:

Federal agency securities are ____ marketable than Treasury bills and therefore carry yields about 1 percentage point ____ than Treasury bills.

Which security listed below best fits the definition, "The principal means of payment in the money market"?

Canada's money market is securities dominated.

Money is one of the most perishable of all commodities.

According to the textbook, the U.S. money market is:

The largest of all money market borrowers worldwide is:

___________ is the largest privately issued portion of the U.S. money market.

Most national money markets usually start with:

Lenders usually try to combat anticipated inflation by extending the term of a loan.

The Federal Reserve's discount rate is determined by demand and supply forces in the financial marketplace.

According to the textbook, the recent credit crisis of 2007-2009 has made the risks of a __________________ money market visible.

Deposit balances of banks held at the Federal Reserve banks and at larger correspondent banks across the nation are examples of:

If the Federal Reserve sets its discount rate too high relative to other money market interest rates, banks are forced to borrow more heavily in the open market, increasing the volatility of interest rates in the open market.