What is a structured instrument?

What is a structured instrument?

Structured financial instruments comprise a range of products designed to repackage and redistribute risk. They are pre-packaged investments based on a single security, a basket of securities, options, commodities, debt issuance or foreign currencies, and to a lesser extent, derivatives.

What are the instruments of money market?

Following are the types of Money Market Instruments:

  • Promissory Note: A promissory note is one of the earliest type of bills.
  • Bills of exchange or commercial bills.
  • Treasury Bills (T-Bills)
  • Call and Notice Money.
  • Inter-bank Term Market.
  • Commercial Papers (CPs)
  • Certificate of Deposits ( CD’s )
  • Banker’s Acceptance (BA)

What are structured financial products?

A structured product, also known as a market-linked investment, is a pre-packaged structured finance investment strategy based on a single security, a basket of securities, options, indices, commodities, debt issuance or foreign currencies, and to a lesser extent, derivatives.

What is the difference between corporate finance and structured finance?

Corporate Finance has its eyes on maximizing the value of shareholders income through long-term and short-term planning and the implementation of various strategies. Structured finance is a convoluted financial device offered to borrowers with unique and mature needs.

What is money market structure?

The Indian monetary market has two broad categories – the organized sector and the unorganized sector. Organized Sector: This sector comprises of the governments, the RBI, the other commercial banks, rural banks, and even foreign banks. The RBI organizes and controls this sector.

Should I invest in structured products?

Structured Products are a good investment if you don’t want to risk all of your capital. As the majority of your money is set aside for protection, Structured Products offer a medium risk method of investing. You will only lose on this investment if the counterparty or deposit taker becomes solvent.

What do you do in structured finance?

Under structured finance jobs, you would be helping companies raise capital by creating “secured” securities and then selling them to investors. The work generally revolves around those companies which have stable cash flows in their business models such as the credit card, student loan, and credit card companies.

What is the purpose of a money market instrument?

What are Money Market Instruments. As the name suggests, money market instrument is an investment mechanism that allows banks, businesses, and the government to meet large, but short-term capital needs at a low cost. They serve the dual purpose of allowing borrowers meet their short-term requirements and providing easy liquidity to lenders.

What are the different types of money market instruments in India?

Types of Money Market Instruments in India. 1 1. Treasury Bills. T-bills are one of the most popular money market instruments. They have varying short-term maturities. The Government of India 2 2. Commercial Bills. 3 3. Certificate of Deposit. 4 4. Commercial Paper. 5 5. Call Money.

Which is the safest money market instrument available?

The Treasury bills are issued by the Central Government and known to be one of the safest money market instruments available. Besides, they carry zero risk, so the returns are not attractive. Also, they come with different maturity periods like 1 year, 6 months or 3 months and are also circulated by primary and secondary markets.

Who are the main players in money market in India?

It’s primary players are the Reserve Bank of India (RBI), commercial banks and financial institutions like LIC, etc., The main money market instruments are Treasury bills, commercial papers, certificate of deposits, and call money. It is highly liquid as it has instruments that have a maturity below one year.

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