Questions from Financial Markets

Q: Assume that you maintain bonds and money market securities in your portfolio

Assume that you maintain bonds and money market securities in your portfolio, and you suddenly believe that long-term interest rates will rise substantially tomorrow (even though the market does not s...

Q: The Bank of Japan desires to decrease the value of the Japanese

The Bank of Japan desires to decrease the value of the Japanese yen against the U.S. dollar. How could it use direct intervention to achieve this goal?

Q: Explain the conditions under which a speculator would like to take a

Explain the conditions under which a speculator would like to take a speculative position in which it will invest in a foreign currency today, even when the speculator has no use for that currency in...

Q: Create a balance sheet for a typical bank, showing its main

Create a balance sheet for a typical bank, showing its main liabilities (sources of funds) and assets (uses of funds).

Q: Would you expect a bank to charge a higher rate on a

Would you expect a bank to charge a higher rate on a term loan or a highly leveraged transaction (HLT) loan? Why?

Q: What are four major sources of funds for banks? Which alternatives

What are four major sources of funds for banks? Which alternatives does a bank have if it needs temporary funds? What is the most common reason that banks issue bonds?

Q: Compare the main sources and uses of funds for finance companies,

Compare the main sources and uses of funds for finance companies, insurance companies, and pension funds.

Q: How does the money market deposit account differ from other bank sources

How does the money market deposit account differ from other bank sources of funds for banks?

Q: Explain the use of the federal funds market in facilitating bank operations

Explain the use of the federal funds market in facilitating bank operations.

Q: How does the yield on a repurchase agreement differ from a loan

How does the yield on a repurchase agreement differ from a loan in the federal funds market? Why?