Money Market Instruments

What this video covers

• Why commercial paper matures at a hard ceiling of 270 days, and how to select the registration exemption over investor preference traps
• How Treasury bills are taxed at the federal level but exempt from state and local taxes, and that this treatment extends to all U.S. Treasury securities
• What makes banker's acceptances relatively safe for international trade, and why the bank guarantee matters
• How repurchase agreements function as collateralized short-term loans, with the Federal Reserve using them for open market operations
• Why the federal funds rate is targeted by the Federal Open Market Committee but ultimately market-determined, not directly set
• The critical distinction between a money market fund (security, regulated by the Securities and Exchange Commission, can break the buck, not Federal Deposit Insurance Corporation insured) and a money market deposit account (bank deposit, Federal Deposit Insurance Corporation insured to $250,000)
• When to flag that no money market instrument, including money market funds, carries Federal Deposit Insurance Corporation insurance