Four money market instruments compared on one yield basis and ranked against a stated ninety-day cash need, in a GF500 Unit 5 comparison worked to the end. Searches like "gf 500 unit 5 assignment example", "gf500 unit 5 sample" and "gf500 unit 5 example" land here.
What a finished GF500 Unit 5 money market instrument comparison looks like
At the center sits a four-row table with columns for issuer, typical maturity range, credit standing, secondary market depth, quote convention and tax treatment. Treasury bills carry a discount yield, so the paper converts a 91-day bill quoted at 5.00 percent discount to a bond-equivalent yield of about 5.13 percent before setting it beside the add-on yields of CDs and commercial paper. Credit spreads over bills are read as prices for default and liquidity risk, with a note that bill interest is exempt from state and local income tax, which narrows the real gap for a taxable holder. Repurchase agreements appear as secured lending, collateral and haircut stated. A closing ranking places bills first for a reserve that cannot tolerate loss and commercial paper last, with the conditions that would change the order.
How a GF500 Unit 5 example is structured
The comparison opens with the cash need it is answering: ninety days, no tolerance for loss of principal, possible early withdrawal. That framing decides which columns matter. Definitions of each instrument follow in two or three sentences apiece, covering who issues it and why. Yield conventions come next, with one conversion worked in full, because a discount yield and an add-on yield cannot be compared directly. The table appears only once everything in it has been explained. Below it, the paper takes the three axes the question names, maturity, credit and liquidity, one at a time, pointing to the row that dominates each. Stress episodes receive a paragraph, the 2008 freeze in commercial paper chief among them, as evidence that liquidity in these markets can vanish all at once. The ranking and its conditions close the paper.
A cash need that sets the criteria
Ninety days, principal protected, possible early draw: the stated need decides which columns carry weight before any instrument is described.
Yields put on one basis
A discount-quoted bill is converted to a bond-equivalent figure in full, so its yield can stand honestly beside add-on quotes.
One table, six columns
Issuer, maturity range, credit standing, market depth, quote convention and tax treatment sit in one grid a reader can scan across.
Spreads read as prices
The gap between commercial paper and bills is interpreted as payment for default and liquidity risk, adjusted for the tax exemption bills enjoy.
Stress as evidence
The 2008 commercial paper freeze shows liquidity drying up across issuers together, which tempers any ranking built on calm-market spreads.
Where marks go in GF500 Unit 5
The instrument comparison loses most of its credit in the yield column. Setting a bill's discount yield beside a CD's add-on rate without conversion understates the bill and can reverse the ranking, and a grader looks for exactly that step. Credit and liquidity used as synonyms is the next common deduction; a negotiable CD can be credit-sound and still hard to sell before maturity. Definitions copied from a glossary, with no comparison drawn between rows, read as a list. Leaving out the tax treatment of bills skews any after-tax comparison. A ranking with no stated cash need behind it cannot be defended, because the right instrument depends on the holder. Marks are also withheld where repurchase agreements appear without their collateral, since the security is what keeps the rate low.
Get a GF500 Unit 5 example written to your instructions
Four instruments or six, the comparison covers whatever your GF500 Unit 5 prompt lists, so send it with the rubric. Yields are converted to one basis and the ranking is tied to a stated cash need. Your first sample costs nothing and generally lands within 24-48h.
GF500 Unit 5 questions, answered
Why convert the Treasury bill yield?
Bills are quoted on a bank discount basis, which divides by face value and uses a 360-day year, so the quoted figure understates what the holder actually earns. Converting to a bond-equivalent or money market yield puts the bill on the same footing as add-on instruments. Skipping this step is one of the most frequent errors marked in this unit.
Should federal funds or bankers' acceptances be included?
Include what your prompt lists. Federal funds are overnight lending between banks and are not available to most corporate treasurers, so the sample mentions them as a reference rate rather than an option. Bankers' acceptances were once a standard entry but have become rare in United States markets, and many current syllabi leave them out.
Can the comparison use current rates?
Yes, provided each rate carries its source and date. Treasury bill rates are published daily by the Treasury, and commercial paper rates by the Federal Reserve. The sample dates every figure so the spreads are comparable at a single moment, since spreads measured on different days can reflect market movement rather than a real difference between instruments.