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Call Market

A type of market in which each transaction takes place at predetermined intervals

and where all of the bid and ask orders are aggregated and transacted at once. The

exchange determines the market clearing price based on the number of bid and ask orders.

A call market is contrasted to an auction market, where orders are filled as soon as a

buyer/seller is found for any given order at an agreed upon price.

In a call market, the price is set by the exchange so the market will clear, or almost clear,

every time orders are filled. This is in stark contrast to the auction market, where prices are

determined by buyers and sellers.

Because the call market groups transactions together, there is a substantial increase inliquidity. Although liquidity is generally considered to be a good quality in any marketplace,

sellers may lose some of the liquidity premium, which is can be substantial.

Commercial papers

In the global money market,commercial paperis an unsecured promissory note with a fixed maturity of

1 to 364 days. Commercial paper is a money-market security issued (sold) by large corporations to get

money to meet short term debt obligations (for example, payroll), and is only backed by an issuing bank

or corporation's promise to pay the face amount on the maturity date specified on the note. Since it is not

backed by collateral, only firms with excellent credit ratings from a recognized rating agency will be able

to sell their commercial paper at a reasonable price. Commercial paper is usually sold at a discount from

face value, and carries higher interest repayment rates than bonds. Typically, the longer the maturity on a

note, the higher the interest rate the issuing institution must pay. Interest rates fluctuate with market

conditions, but are typically lower than banks' rates.

Certificate of deposit

A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified

fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks

and are insured by the FDIC. The term of a CD generally ranges from one month to five years.

http://en.wikipedia.org/wiki/Money_markethttp://en.wikipedia.org/wiki/Unsecured_debthttp://en.wikipedia.org/wiki/Promissory_notehttp://en.wikipedia.org/wiki/Maturity_(finance)http://en.wikipedia.org/wiki/Security_(finance)http://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Payrollhttp://en.wikipedia.org/wiki/Collateral_(finance)http://en.wikipedia.org/wiki/Credit_ratinghttp://en.wikipedia.org/wiki/Credit_rating_agencyhttp://en.wikipedia.org/wiki/Discounts_and_allowanceshttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Discounts_and_allowanceshttp://en.wikipedia.org/wiki/Credit_rating_agencyhttp://en.wikipedia.org/wiki/Credit_ratinghttp://en.wikipedia.org/wiki/Collateral_(finance)http://en.wikipedia.org/wiki/Payrollhttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Security_(finance)http://en.wikipedia.org/wiki/Maturity_(finance)http://en.wikipedia.org/wiki/Promissory_notehttp://en.wikipedia.org/wiki/Unsecured_debthttp://en.wikipedia.org/wiki/Money_market

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A certificate of deposit is a promissory note issued by a bank. It is a time deposit that restricts holders

from withdrawing funds on demand. Although it is still possible to withdraw the money, this action will

often incur a penalty.

For example, let's say that you purchase a $10,000 CD with an interest rate of 5% compounded

annually and a term of one year. At year's end, the CD will have grown to $10,500 ($10,000 * 1.05).

CDs of less than $100,000 are called "small CDs"; CDs for more than $100,000 are called "large CDs" or

"jumbo CDs". Almost all large CDs, as well as some small CDs, are negotiable.

Repo market

The over-the-counter repo market is now one of the largest and most active sectors in

the US money market. Repos are widely used for investing surplus funds short term,

or for borrowing short term against collateral. Dealers in securities use repos to

manage their liquidity, finance their inventories, and speculate in various ways. The

Fed uses repos to manage the aggregate reserves of the banking system.

What are Repos?

Repos, short forrepurchase agreements, are contracts for the sale and future

repurchase of a financial asset, most often Treasury securities. On the terminationdate, the seller repurchases the asset at the same price at which he sold it, and pays

interest for the use of the funds. Although legally a sequential pair of sales, in effect a

repo is a short-term interest-bearing loan against collateral.

Forex market

Forex (FOReign EXchange market) is an inter-bank market that took shape in 1971 when

global trade shifted from fixed exchange rates to floating ones. This is a set of transactions

among forex market agents involving exchange of specified sums of money in a currency unit ofany given nation for currency of another nation at an agreed rate as of any specified date. During

exchange, the exchange rate of one currency to another currency is determined simply: by supplyand demandexchange to which both parties agree...

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