a) what are financial markets. b) explain the following : i)treasury bills ii)debenture iii)certificate of deposit

a) what are financial markets.

b) explain the following :

i)treasury bills
ii)debenture
iii)certificate of deposit

Solutions

Expert Solution

A) Financial market is a market where people trade securities at a low transaction cost.Trading can be done in stocks, bonds, derivatives, forex and so on.

B)1) Treasury bills :- A treasury bill a short term security issued by US government and baced by treasury department with a maturity of less than one year. Treasury bills are usually sold in the denominations of $1,000. These securities are regarded as low risk and secure investment.

2) Debentures:- These are long term securities which are issued by companies and government, and are not backed by collateral. Debentures are only backed by the creditworthiness and reputation of the issuer. These securities also yield a fixed rate of interest.

3) Certificate of deposits:- A certificate of deposit is a product offered by banks for a fixed rate of premium in exchange of a lump sum of deposit which needs to be kept untouched for required period of time. It is issued by almost every financial institution but with different terms and rates, depending on the banks.

jeff jeffy answered 1 year ago

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