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ee of marketability. Although interest income on these securities is subject to federal income taxes, issues of the Farm Credit agencies are not subject to state and local income taxes issues of the Farm Credit agencies are not subject to state and local income taxes. Maturities range from several days to approximately 15 years. About half of the securities outstanding mature in less than a year.

Banker's Acceptances

Banker's acceptances are drafts that are accepted by banks, and they are used in financing foreign and domestic trade. The creditworthiness of bankers acceptances is judged by the bank accepting the draft, not the drawer. Acceptances generally have maturities of less than 6 months and are of high quality. They are traded in an over the counter market dominated by five principal dealers. The rates on bankers acceptances tend to slightly higher than rates on treasury bills of like maturity, and both are sold on a discount basis. Banker's acceptance can be both on domestic banks and on large foreign banks.

Commercial Paper

Commercial paper of short term unsecured promissory notes issued by finance companies and certain industrial concerns. Commercial paper can be sold either directly or through dealers. Many large sales finance companies have found it profitable, because of the volume, to sell their paper directly to investors, thus by passing dealers. Among companies selling paper on this basis are the General Electric Credit Corporation, Ford Motor Credit Company, General Motors Acceptance Corporation (GMAC), and Sears, Roebuck Acceptance Corporation. Paper sold through dealers is issued by Industrial companies and smaller finance companies. Dealers very carefully screen the creditworthiness of potential issuers. In a senses, dealers stand behind the paper they place with investors.

Rates on commercial paper are somewhat higher than rates on Treasury bills of the same maturity and about the same as the rates available on bankers acceptances. Paper sold directly generally commands a lower yield than paper sold through dealers. Usually, commercial paper is sold on a discount basis, and maturities generally range from 30 to 270 days. Most paper is held to maturity, for there is essentially no secondary market. Often, direct sellers of commercial paper will repurchase the paper on request. Arrangements may also be made through dealers for repurchase of paper sold through them. Commercial paper is sold only in large denominations, usually $100,000.

Negotiable Certificates of Deposit

A short term investment, the certificate (CD) is evidence of the deposit of funds at a commercial bank for a specified period of time and at a specific rate of interest. The most common denomination is $100,000, so its appeal is limited to large investors. Money market banks quote rates on CDs; these rates are changed periodically in keeping with changes in other money market rates. Yields on CDs are greater than those on Treasury bills and repose and about the same as those on bankers acceptances and commercial paper. Original maturities of CDs generally range from 30 to 360 days. A good secondar本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。