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  • MONEY MARKET INSTRUMENTS IN THE UNITED STATES  By : rimmie
    Treasury bills are issued with three different original maturities: three months, six months, and one year. The three-month and six-month bills are offered weekly. The one-year bills are offered monthly. So there is an almost continuous stream of new issues of Treasury bills in the market. Treasury bills are quoted on a discounted basis computed on actual days in a 360-day year.
  • HEDGING ALTERNATIVES IN CONTROLLED EXCHANGE MARKETS  By : rimmie
    Exporters and importers have cash flows in foreign currency in the opposite direction. Exporters have a receivable. a future cash inflow, in foreign currency; importers have a payable, a future cash outflow, in foreign currency. Their exchange exposure arises because the exporter needs to convert the foreign currency into local currency to pay for expenditures and the importer must convert the local-currency revenues to foreign currency to pay for the imports.
  • COMPARING RATES IN THE MONEY MARKET  By : rimmie
    Another complication arises when comparing the interest rate of securities which have interest payments during the holding period with securities which do not. This is the case, for example, when comparing a one-year Treasury note (let's say originally with a two-year maturity) with a three-month (13-week) Treasury bill. The one-year note is traded on the basis of yield to maturity and a 365-day year; the Treasury bill is traded on a discounted basis and a 360-day year.

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