Money Markets by Hand: Discount Yields, Money-Market Yields, Day Counts, Short-Term Deposits, Repos & Cash-Fund Yields
Understand the short end of the market. You will price discount paper from a quoted discount rate, convert between discount, money-market and bond-equivalent yields, apply day-count conventions, value term deposits and certificates, compute repo interest and haircuts, read a cash fund's yield and build a short-term ladder, all with fictional instruments and every cell checked as you go.
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About this course
In this course you act as the treasurer of a fictional manufacturer and calculate every short-term instrument by hand. You count days with DAYS and apply ACT/360 and ACT/365 from a convention table, price discount paper from a quoted discount rate and bid for a target yield, and convert discount rates into money-market and bond-equivalent yields in basis points. You value term deposits with effective annual yields and early-withdrawal penalties, compute repo cash after haircuts, repo interest and an overnight roll over a weekend, find the all-in cost of issuing short-term paper, annualise a cash fund's 7-day yield and build a ladder with business-day maturities, SUMIFS liquidity buckets and a chart.
Lessons
- Day Counts: ACT/360 vs ACT/365, Days Between Dates & the Same Rate on Two Bases Pro
- Discount Paper: Discount Amount, Price from a Discount Rate, the Bid for a Target Yield & the Implied Rate Pro
- Yield Conversions: Discount Rate → Money-Market Yield → Bond-Equivalent Yield Pro
- Term Deposits & Certificates: Interest at Maturity, Effective Annual Yield, Early-Withdrawal Penalties & Rolling Pro
- Repos: Collateral, Haircuts, Repo Interest, the Repurchase Price & an Overnight Roll Pro
- Short-Term Company Paper: Issue Proceeds, Dealer Fees & the All-In Cost of Funds Pro
- Cash-Fund Yields: Daily Income per Unit, Fees, the 7-Day Yield & the Compounded Yield Pro
- A Short-Term Ladder: Business-Day Maturities, Interest, Liquidity Buckets & a Chart Pro