- 10 Marks
AFM – Nov 2018 – L3 – Q5b – The role of the treasury function in multinationals
Explain key money market instruments, including securitization, reverse repurchase agreements, banker’s acceptance, and commercial paper.
Question
The money market deals primarily with short-term instruments with short-term maturities and the repayment of funds borrowed is required within a short period of time.
Required:
Explain the following in the money markets:
i) Securitization.
ii) A “Reverse Repurchase Agreement”.
iii) Banker’s Acceptance.
iv) Commercial Paper.
(10 marks)
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