Financial markets. Lecture number eight. Negotiable CD, CD means certificate deposit.
A certificate deposit is simply a deposit at a depository institution.
Negotiable means a security can be buy and sold. The first characteristics is a
large denomination. Denomination means the size of the face, you can go and
invest 100 dollars. Large denomination is 100, or 10,000,000 dollars. The
typical investor is institutional investor.
The typical buyer is an institutional investor a typical seller we call
issuer is typically commercial bank.
Because it is a deposit, certificate
deposit it can be issued by any other depositor, institution like loaners. The
term security is like many other securities it mature with a particular day, 10
days, 15 day or any other. It is a fixed mature. The next characteristic is a
bearer instruments. Bearer instruments
means as we talked in the previous lecture, bear to the one from how posses it
to the second one. How about non negotiable CD? It is when I cannot sell it to
you, and when there is a nonnegotiable CD, there is no market. So that for
having a market it must be negotiable. And there are something else all of
these treasury builds are negotiable instruments, of course if they are traded
on the market.
watch "financialmanagements, lecture eight" here
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