The document discusses money markets and money market instruments. It defines a money market as a market for short-term financial instruments with maturities of less than one year. Money market instruments allow borrowers to access short-term funds and provide liquidity to lenders. Some key money market instruments discussed include treasury bills, commercial paper, certificates of deposit, commercial bills, and repurchase agreements. The money market plays an important role in economic development by facilitating the flow of funds.
This ppt is prepared to provide detailed information regarding Forwards and Futures contracts of Derivatives the topics covered under this are Meaning of Forwards contracts, Underlying Assets of Forwards contracts, FEATURES OF FORWARD CONTRACTS, Tailored made, Why Forwards contracts, FUTURES CONTRACT, What is A Futures Contract, Characteristics of Futures contracts, Mechanism of Trading in Futures Market, Margin requirement, Marking-to-market (M2M), SETTLING A FUTURE POSITION, OFFSETTING, CASH DELIVERY, by Sundar, Assistant Professor of commerce.
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https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
Financial Markets - Money market-Organized and Unorganized-Sub markets
Capital market- Primary market-IPO-FPO- NFO, Book Building-Right Issue-Private placement- Bonus issue-Buyback
Secondary Market-Stock exchanges- Role and functions of Stock Exchanges- BSE-NSE.
Regulatory authorities and their functions – RBI, SEBI
This ppt is prepared to provide detailed information regarding Forwards and Futures contracts of Derivatives the topics covered under this are Meaning of Forwards contracts, Underlying Assets of Forwards contracts, FEATURES OF FORWARD CONTRACTS, Tailored made, Why Forwards contracts, FUTURES CONTRACT, What is A Futures Contract, Characteristics of Futures contracts, Mechanism of Trading in Futures Market, Margin requirement, Marking-to-market (M2M), SETTLING A FUTURE POSITION, OFFSETTING, CASH DELIVERY, by Sundar, Assistant Professor of commerce.
Subscribe to Vision Academy for Video assistance
https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
Financial Markets - Money market-Organized and Unorganized-Sub markets
Capital market- Primary market-IPO-FPO- NFO, Book Building-Right Issue-Private placement- Bonus issue-Buyback
Secondary Market-Stock exchanges- Role and functions of Stock Exchanges- BSE-NSE.
Regulatory authorities and their functions – RBI, SEBI
Meaning, nature and role of capital market, features of developed capital market, reforms in the capital market, regulatory framework of capital market, capital market instruments and innovation in financial instruments.
Descriptions and explanation of all types of derivative instruments to trade with on the capital market.
http://www.koffeefinancial.com/Static/Learn.aspx
Meaning, nature and role of capital market, features of developed capital market, reforms in the capital market, regulatory framework of capital market, capital market instruments and innovation in financial instruments.
Descriptions and explanation of all types of derivative instruments to trade with on the capital market.
http://www.koffeefinancial.com/Static/Learn.aspx
Click on the link to watch full video on youtube
https://youtu.be/-rMBOD618W0
Money market is component of financial system where money or its equivalent assets can be traded. Money here represents liquidity.
It is place where public, large corporates and government manage their short term cash needs.
Short term borrowing and lending is done by financial institutions and dealers with liquid instruments having short term maturities (fortnight to one year).
Thus, money market is a market where short term obligations such as treasury bills, commercial papers and bankers acceptances are bought and sold.
FEATURES OF MONEY MARKET
It is a market purely for short-term funds having a maturity period less than one year only.
Transactions have to be conducted without the help of brokers.
It comprises of several sub-market like call money market, acceptance bill market, treasury bill market etc.
The players in the money market include commercial banks, government, corporates and NBFC (Non-Banking Financial Companies).
Transactions take place through phone i.e., oral communication. Relevant documents and written communications can be exchanged subsequently. There is no formal place like stock exchange as in the case of a capital market.
Presentation on Fixed Income Instruments. Content includes definition, types and Advantages.
Fixed income refers to any type of investment under which the borrower or issuer is obliged to make payments of a fixed amount on a fixed schedule. The benefit from investment is called a return.
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2. MONEY MARKET
Money market instruments are those
instruments, which have a maturity period of less
than one year.
Geoffrey Crowther in his book” An outline of
Money” has stated “Money market is a collective
name given to the various firms and institutions
that deal with various grades of near money”.
Reservoir of short term funds.
3. Characteristics of a
developed money market.
A developed commercial banking system.
Presence of a central bank.
Sub-markets
Near money assets
Availability of ample resources
Integrated interest rate structure
4. Functions of money market
Economic development – Money market
assures supply of funds; financing is done
through discounting of the trade
bills, commercial banks, acceptance houses
and brokers.
Profitable Investment – the excess reserves of
commercial banks invested in near money
assets.
Borrowings by the Government – short term
funds at very low interest.
5. Importance For Central Bank – If the money
market is well developed, the central bank
implements the monetary policy successfully.
Mobilization of Funds – helps in transferring
funds from one sector to another.
Savings And Investment – encouraging savings
and investment by promoting liquidity and
safety of financial assets.
Self-sufficiency Of Commercial Banks –
commercial banks can meet their financial
requirements by recalling some of their loans.
6.
7. MONEY MARKET
INSTRUMENTS
Investment in money market is done through
money market instruments.
Money market instrument meets short term
requirements of the borrowers and provides
liquidity to the lenders
The most active part of the money market is the
market for overnight call and term money
between banks and institutions and repo
transactions
8. 1.GOVERNMENT SECURITIES
(G- Secs)
Issued by the Government for raising a public
loan or as notified in the official Gazette.
Maturity ranges from of 2-30 years.
G-secs consist of Government Promissory Notes,
Bearer Bonds, Stocks or Bonds, Treasury Bills or
Dated Government Securities.
No default risk as the securities carry sovereign
guarantee.
Ample liquidity as the investor can sell the
security in the secondary market
9. 2. MONEY MARKET AT CALL AND
SHORT NOTICE
Money at call is a loan that is repayable on
demand, and money at short notice is repayable
within 14 days of serving a notice.
Participants are banks & all other Indian
Financial Institutions as permitted by RBI.
Banks borrow call funds for a variety of reasons to
maintain their CRR, to meet their heavy
payments, to adjust their maturity mismatch etc.
10. 3. TREASURY BILLS
Short term (up to one year) borrowing
instruments of the Government of India.
Enable investors to park their short term surplus
funds while reducing their market risk.
Issued at a discount to face value. The return to
the investor is the difference between the
maturity value and issue price.
RBI issues T-Bills for three different maturities: 91
days, 182 days and 364 days
11. 4. CERTIFICATES OF
DEPOSITS
A CD is a time deposit, financial product
commonly offered to consumers by banks.
CDs are negotiable instrument.
Financial Institutions are allowed to issue CDs for
a period between 1 year and up to 3 years.
normally give a higher return than Bank term
deposit, and are rated by approved rating
agencies.
12. 5.COMMERCIAL BILLS
Commercial bill is a short term, negotiable, and
self-liquidating instrument with low risk.
Written instrument containing an unconditional
order.
Once the buyer signifies his acceptance on the bill
itself it becomes a legal document.
Commercial bill is a short term, negotiable, and
self-liquidating instrument with low risk.
13. 6. COMMERCIAL PAPER
Commercial Paper is a money-market security
issued (sold) by large banks and corporations to
get money to meet short term debt obligations .
Commercial paper is usually sold at a discount
from face value.
Interest rates fluctuate with market
conditions, but are typically lower than banks‘
rates.
14. 7.Repurchase Agreements
Repo or Reverse Repo are transactions or short
term loans in which two parties agree to sell and
repurchase the same security.
They are usually used for overnight borrowing
Repo/Reverse Repo transactions can be done only
between the parties approved by RBI and in RBI
approved securities