PRELIM REVIEWER IN CAPITAL MARKET

This must also be easy to withdraw the funds from at a moment's notice. They can’t have large transaction fees. Otherwise, the business would just keep extra cash in a safe.

Large companies with impeccable credit can simply issue short-term unsecured promissory notes to raise cash.

Banks are the only businesses that use federal funds. Banks use them to meet the Federal Reserve requirement each night. It's roughly 10% of all bank liabilities over $58.8 million.

Banks also issue CDs in foreign banks. These are held in euros instead of U.S. dollars.

This is a contract between two parties to exchange all future interest rate payments from a loan.

The bank issues a letter of credit that it will redeem the money market instrument if the issuer does not.

The federal government raises cash by issuing Treasury bills. Their duration is for one year or less.

Cities and states issue short-term municipal bonds to raise cash. The interest payments on these are exempt from federal taxes.

This combine money market instruments. The fund companies sell shares of these funds to investors.

Obligate traders to either buy or sell a money market security at an agreed- upon price on a certain date in the future.