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1. Direct financing
The financial intermediaries help to mobilize of fund from
surplus unit to deficit unit. Deficit unit issue financial claims
on them and sell them for money to surplus unit.
2. indirect financing:
It involves indirect flow of funds through the involvement of
the
financial
intermediaries.
It
is
also
known
as
Other
benifict?
and high
marketability.
The money market instrument are,,,T bills, Commercial Paper,
Certificates of Deposit, Bankers' Acceptance , Repurchase agreement,
government bond, euro dollars etc.
A. Treasury Bills:
B.Commercial Paper:
Commercial paper is theshort-term unsecured promissory note
issued by only the largest and most financially secured firms.
Commercial Paper is the largest (in terms of dollar value
outstanding) of the money market instruments.
One reason for large amount of commercial paper outstanding is
that companies with strong credit ratings can generally borrow