to 30 years or longer. Our focus will be on medium-term notes with original maturities of one year or less. The largest group of players in the global money markets are finan- cial institutions that include depository institutions, investment banks, and insurance companies. These institutions are simultaneously the big- gest investors in and issuers of money market instruments. There are specialized instruments that are unique to this group of borrowers which include certificates of deposits, bankers acceptances, federal funds, and funding agreements. Chapter 6 details these instruments. Chapter 7 describes short-term floating-rate securities. The term "floating-rate security" covers several different types of instruments with one common feature: the securitys coupon rate will vary over the life of the instrument. Approximately, 10% of publicly traded debt issued worldwide possesses a floating coupon. Floating-rate securities are the investment of choice for financial institutions whose funding costs are based on a short-term floating rate. One of the largest segments of the global money markets is the mar- ket for repurchase agreements. The repurchase agreement on one hand is an efficient mechanism used by security dealers to finance bond posi- tions, and on the other a relatively safe investment opportunity for investors such as money market funds and corporations. In Chapter 8, we review repurchase agreements as well as their major uses. Chapters 9 and 10 cover short-term mortgage-backed and asset- backed securities. Mortgage-backed securities are securities backed by a pool of mortgage loans. The pool of loans is referred to as the collateral. While residential mortgages are by far the largest type of asset that has been securitized, other assets such as consumer loans, business loans and receivables have also been securitized. Securities backed by collat- eral other the mortgage loans are called asset-backed securities. The largest sectors of the asset-backed securities market in the United States are securities backed by credit card receivables, auto loans, home equity loans, manufactured housing loans, and student loans. Derivatives are financial instruments that derive their value from some underlying price, index, or interest rate. Money market practitioners use derivatives to control their exposure to risk by taking positions to either diminish or enhance this exposure. In Chapters 11 and 12, we describe these derivative instruments and how they are employed to create advantageous risk and return patterns. Chapter 11 describes forward con- tracts, futures contracts, and forward rate agreements. Chapter focuses on swap contracts and caps/floors. THEGLOBALMONEYMARKETS     The activity of financial institutions in the money market involves an