Financial Markets & Institutions ECN 324 PHASE 1 REVIEW [Homework Questions]

Slides:

Advertisements

Similar presentations

T HE BOND MARKET. P URPOSE OF CAPITAL MARKET Firms and individuals use capital markets for long-term investments.

Advertisements

6 Money Markets. Chapter Objectives Provide a background on money market securities Explain how institutional investors use money markets Explain the.

Money Market Instruments. n money market instruments are defined as debt instruments with a maturity of one year or less. Money Markets serve important.

Taxes, Fiscal, and Monetary Policies

All Rights ReservedDr David P Echevarria1 CHAPTER 7 BOND MARKETS.

Ch 12. The Federal Reserve System. Some Notes:  Open market operation: the buying and selling of government securities by the Fed.  Monetary policy:

Intermediate Investments F3031 Bonds and Fixed Income Securities What is a bond? –A Bond is the basic fixed income security that obligates the issuer to.

Federal Reserve Economics 71a Spring 2007 Mayo, Chapter 5 (skim) Lecture notes 2.5.

Ch. 13: The Federal Reserve System Del Mar College John Daly ©2003 South-Western Publishing, A Division of Thomson Learning.

The monetary policy uses three tactics to maintain the monetary stability. They are  Money supply  Money demand  Managing the risks within banking.

CORPORATE FINANCIAL THEORY Lecture 8. Corp Financial Theory Topics Covered: * Capital Budgeting (investing) * Financing (borrowing) Today: Revisit Financing.

INTEREST RATES 9/16/2009BAHATTIN BUYUKSAHIN,CELSO BRUNETTI.

An Introduction to Bonds Tina Horvath. What is a Bond? w Debt instrument: When one purchases a bond, one essentially lends an organization such as the.

Financial Assets (Instruments)

1 Bonds (Debt) Characteristics and Valuation What is debt? What are bond ratings? How are bond prices determined? How are bond yields determined? What.

 Monetary policy- changes in the money supply to fight inflations or recessions.

Monetary Policy.

Chapter 13 and 15.  Altering the money supply and interest rates to manipulate the economy. Chapter 13.

CHAPTER 7 Money Markets. Copyright© 2003 John Wiley and Sons, Inc. Overview of the Money Market Short-term debt market - most under 120 days. A few high.

Copyright © 2012 Pearson Education Chapter 6 Interest Rates And Bond Valuation.

ALOMAR_212_4 1 Financial Market Instruments. ALOMAR_212_42 What are the securities (instruments) traded in the financial market? 1- Money Market Instruments:

T HE M ONETARY S YSTEM ETP Economics 102 Jack Wu.

Monetary Policy 15 C H A P T E R GOALS OF MONETARY POLICY …to assist the economy in achieving a full-employment, noninflationary level of total output.

CHAPTER 3 Monetary Policy. Copyright© 2003 John Wiley and Sons, Inc. Expansionary Monetary Policy Increases the money supply or money growth rate and.

Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Principles of Finance 5e, Ch. 2 Financial Assets © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a.

Pricing of Bonds. Outline  Time Value of Money Concepts  Valuation of Fixed Income Securities  Pricing zero coupon bonds  Price/Yield Relationship.

The Investment Function in Financial-Services Management

Chapter 12 Supplement A: Fixed-Income Securities Chapter 12 Supplement A Fixed-Income Securities.

Monetary Policy Tools Chapter 16 Section 3Chapter 16 Section 3.

CHAPTER NINE The Investment Function in Banking and Financial Services Management

CHAPTER 6 Money Markets. Chapter Objectives n Provide a background on money market securities n Explain how institutional investors use money markets.

All Rights ReservedDr David P Echevarria1 CHAPTER 6 MONEY MARKETS.

1 CHAPTER 6 Money Markets. 2 CHAPTER 6 OVERVIEW This chapter will: A. Provide a background on the most popular money market securities B. Explain how.

Chapter 14 In-Class Notes. Background on Bonds Bonds: long-term debt securities issued by government agencies or corporations that are collateralized.

MONETARY POLICY Conducted by: the Federal Reserve System.

T HE M ONETARY S YSTEM ETP Economics 102 Jack Wu.

Copyright© 2003 John Wiley and Sons, Inc. Power Point Slides for: Financial Institutions, Markets, and Money, 8 th Edition Authors: Kidwell, Blackwell,

Banks and Banking October 18, 2011 – Mr. Graboski Aim: What is the Federal Reserve System and what are its functions? Do Now: Write down one question you.

The Federal Reserve Part 2 Monetary Policy. Under the Monetary Policy definition, write: Easy Money Policy Easy money policy is monetary policy that results.

8 Bond Valuation and Risk. PRELIMINARY COMMENTS Unfortunately, we do not have time to delve deeply into Ch. 8. However, there are a few key concepts about.

1 Chapter 06 Understanding Financial Markets and Institutions McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 15 Monetary Policy. Money Market – determines interest rate Demand for Money Transactions Speculative Precautionary Supply of money – controlled.

Part Chapter © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 1 McGraw-Hill Money, Financial Institutions, and Securities Markets 1 Chapter.

T ERM S TRUCTURE O F I NTEREST R ATES. G ROUP 8 03 Tashween Ahluwalia 06 Ayush Bhatia 07 Naresh Bhoravat 11 Amit Das 23 Vinod Iyer 53 Mita Shah 61 Vishal.

Ch 6: Bonds & Bond Valuation Learning Goals 1.Describe bond characteristics. 2.Apply the basic valuation model to bonds. 3. Understand the impact of changing.

Actions of the Federal Reserve

Chapter 13-4 The Federal Reserve System. The Federal Reserve  A central bank is an institution that oversees and regulates the banking system and controls.

Markets & Interest Rates. Financial Markets All entities need finance to run business Financial markets - Platform that brings together entities with.

Chapter 6 Bonds (Debt) - Characteristics and Valuation 1.

082SIS52 Ryu Soo-hyun. Money Market  Money Market - Subsection of fixed income market - financial market for short-term borrowing & lending - provides.

1 Chapter 1 Money, Banking, and Financial Markets --An Overview © Thomson/South-Western 2006.

Factors Affecting Choice of Investment Securities (continued)

CHAPTER 7 Money Markets.

Financial Markets & Institutions ECN 324

CHAPTER 7 BOND MARKETS All Rights Reserved Dr David P Echevarria.

CHAPTER 6 MONEY MARKETS All Rights Reserved Dr David P Echevarria.

Unit Four: Monetary Policy.

Standard SSEMA2- Explain the role and function of the Federal reserve.

Financial Market Theory

CHAPTER NINE The Investment Function in Banking and Financial Services Management

Financial Institutions and Markets

Importance of credit markets

CHAPTER 3 Monetary Policy.

Financial Market Theory

Corporate Financial Theory

The Fractional Reserve System or Banking and How Money is Created

Reserve Requirement (aka Reserve Requirement Ratio or Reserve Ratio)

Interest Rates and Risk

Presentation transcript:

Financial Markets & Institutions ECN 324 PHASE 1 REVIEW [Homework Questions]

TOPICS FOR CH 1 Financial Market Overview A.W HAT IS THE DIFFERENCE BETWEEN [C APITAL ] S URPLUS AND D EFICIT MARKETS B.W HAT IS THE DIFFERENCE BETWEEN P RIMARY AND S ECONDARY MARKETS ? C.W HAT IS THE DIFFERENCE BETWEEN M ONEY AND C APITAL MARKETS ? D.W HAT ARE THE THREE MAIN FUNCTIONS OF FINANCIAL MARKETS ?

TOPICS FOR CH 2 Interest Rates A.W HOM DEMANDS AND SUPPLIES FUNDS IN THE L OANABLE F UNDS T HEORY ? B.H OW DOES THE SUPPLY OF AND DEMAND FOR MONEY [ CREDIT ] IMPACT INTEREST RATES ? C.W HAT CAUSES CHANGES IN INTEREST RATES ? D.W HAT IS THE F ISHER E FFECT AND WHY IS IT IMPORTANT ?

TOPICS FOR CH 4 Federal Reserve System A.W HAT ARE THE PRINCIPAL OBJECTIVES OF THE F EDERAL R ESERVE S YSTEM ? B.H OW IS THE F EDERAL R ESERVE ORGANIZED ? C.W HAT IS THE FUNCTION OF THE F EDERAL O PEN M ARKET C OMMITTEE (FOMC)? D.W HAT ARE THE GOALS OF M ONETARY P OLICY ? F ISCAL P OLICY ? E.H OW DO CHANGES IN M ONETARY P OLICY AFFECT BUSINESS ? F.H OW DOES THEY F ED INCREASE ( DECREASE ) THE MONETARY BASE ?

TOPICS FOR CH 5 Monetary Theory & Policy A.H OW DO K EYNESIANS TREAT THE SUPPLY OF MONEY ? B.H OW DO M ONETARISTS TREAT THE SUPPLY OF MONEY ? C.W HY IS VELOCITY IMPORTANT ? D.W HAT DOES THE T HEORY OF R ATIONAL E XPECTATIONS SAY ABOUT THE EFFECTIVENESS OF GOVERNMENT POLICY INITIATIVES ? E.W HAT POLICY TOOLS CAN THE F EDERAL R ESERVE USE TO CONTROL INFLATION ?

TOPICS FOR CH 6 Money Markets A.W HAT ARE THE 4 MAIN TYPES OF MONEY MARKET INSTRUMENTS ? B.W HO ISSUES COMMERCIAL PAPER ? WHY ? C.H OW DOES THE R EPURCHASE ( REPO ) AGREEMENT WORK ? D.W HY ARE F ED F UNDS IMPORTANT TO FINANCIAL INSTITUTIONS ? E.W HAT ARE E URODOLLAR DEPOSITS AND WHY ARE THEY IMPORTANT ?

TOPICS FOR CH 7 Bond Markets A.H OW DOES THE F ED USE ITS INVENTORY OF TREASURY SECURITIES ? B.W HO ISSUES MUNICIPALS ? W HAT IS THEIR PRINCIPAL ATTRACTION TO AN INVESTOR ? C.W HAT ARE ZERO - COUPON BONDS ? W HY MIGHT BORROWERS PREFER THEM ? D.W HAT ARE THE TWO PRINCIPAL SOURCES OF RISK IN A BOND INVESTMENT ? E.W HAT ARE THE TWO SOURCES OF RISK WHEN INVESTING IN FOREIGN BONDS ?

TOPICS FOR CH 8 Bond Valuation & Risk A.W HAT CASH FLOWS ARE ASSOCIATED WITH BOND INVESTMENTS ? B.W HAT EFFECTS DO INTEREST RATE INCREASES ( DECREASES ) HAVE ON ; 1.M ARKET VALUES OF BONDS ? 2.C URRENT YIELDS ? 3.Y IELDS TO MATURITY ? C.W HAT DOES IT MEAN WHEN A BOND SELLS ; 1. AT PAR, 2. AT A DISCOUNT, 3. AT A PREMIUM ? D.H OW DO INCREASES IN EXPECTED INFLATION RATES AFFECT BOND YIELDS ?