saving and money market is similar in aspects of regulation D, minimal balance, and FDIC insurance. then why does money market offer higher rate of return?
When the RBI has a repo rate of 6% and a reverse repo rate of 7.5%, one would expect the overnight call rate among the banks to be somewhere between 6% and 7.5%. I believe the current very low levels of the call rate is because of the RBI using the repo window to suck liquidity only to a limited extent of Rs 3000 crore / day. What i dont understand is how the call rates can be as low as 1% (the 1% is for interest charged per annum right?). Isnt this cheap money for the banks then? Why not borrow cheap and park them in treasury bonds or liquid mutual funds? How can the overnight call rate be far off from the market interest rate irrespective of the repo and reverse repo rates and the amount of money the RBI actually does borrow from the commercial banks?

Anywhere better than 4.45% that is not internet-only?


Product Description
This digital document is a journal article from Journal of Banking and Finance, published by Elsevier in 2005. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.
Description:
This paper provides new insight into the relationship between short sales and stock market returns using a sample of stocks sold short in Canada. Short interest is defined in relation to trading volume. The results strongly support the assertion that short sales and excess returns are contemporaneously negatively correlated in Canada. The paper further finds that excess returns are more negative for small firms because the supply of shortable shares is constrained for these firms. Excess returns are less negative for stocks with associated options and convertible bonds. Importantly, the evidence is consistent with the proposition that informed traders short sell Canadian interlisted stocks in Canada, rather than the US, to exploit lower execution costs. Together the results suggest that less restrictive regulation of short sales will improve the efficiency of markets.
BUY NOW: The relationship between short interest and stock returns in the Canadian market
I currently bank at Bank of America. I am disappointed in its low interest rates and I am thinking of switching to a brokerage or mutual fund company that handles checking and savings accounts and retirement funds. Can anyone recommend one that you get a decent rate of return with low rates? I am also thinking about a possible connection of a 5% capital savings money market account to my existing accounts. Does it make sense to do?
What I am trying to say is that when you just sell a stock and cash position, and you want to get a good interest while you are sitting there to wait for the next opportunity that comes stock, which corridor online brokerage (Fidelity, E Trade, Ameritrade, Schwab, Scottrade, etc) is better at interest in the position of cash?





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