Investment Alternatives
by Nadine AbdEl Atti
1. Money Market Securities
1.1. Characteristics (4)
1.2. Maturity: 1 day to 1 year or 90 days
1.3. Examples: Money Market Mutual Funds, Treasury Bills, Commercial Paper, Negociable CDs
1.3.1. Treasury Bills
1.3.1.1. Short term , sold at discount, Risk Free, By US Gov
1.3.1.2. Discount Yield equation and its importance
1.3.1.3. Investment Yield equation and its importance
2. Capital Market Securities
2.1. Characteristics (4) Long term, High risk
2.2. Maturity: Greater than one year
2.3. Fixed Income Securities
2.3.1. Characteristics (2)
2.3.2. Bonds
2.3.2.1. Definition
2.3.2.1.1. Long term, at the time of purchase, if the buyer sells.
2.3.2.2. Characteristics
2.3.2.2.1. Accrued Interest
2.3.2.2.2. Selling at Premiums
2.3.2.2.3. Selling at Discounts
2.3.2.2.4. Callable Bonds
2.3.2.2.5. Zero Coupon Bond
2.3.2.3. Types of Bonds
2.3.2.3.1. Treasury Securities
2.3.2.3.2. Federal Agency Securities
2.3.2.3.3. Municipal Securities
2.3.2.3.4. Corporates
3. Financial Assets Definition
3.1. Indirect Finance
3.1.1. Definition
3.1.2. Examples: Pension Funds - Mutual Funds