Chapter 1
3. Some economists suspect that one of the reasons that economies in developing countries grow so slowly is that they do not have well-developed financial markets. Does this argument make n?
Financial markets are crucial to promoting greater economic efficiency by channeling funds from people who do not have a productive u for them to tho who do. Well-functioning financial markets are a key factor in producing high economic growth, and poorly performing financial markets are one reason that many countries in the world remain poor.
Chapter 2
3. Why are financial intermediaries so important to an economy?
Becau the intermediary obtains funds from savers then makes loans/investments with borrowers. This process, called financial intermediation, is actually the primary means of moving funds from lenders to borrowers. More important source of finance than curities
markets Needed becau of transactions costs, risk sharing, and asymmetric information .
4. Discuss the differences between depository institutions, contractual savings institutions, and investment intermediaries.
Depository institutions are financial intermediaries that accept deposits from individuals and institutions and make loans.
文明校园创建工作实施方案
Contractual saving institutions are financial intermediaries that acquire funds at periodic intervals on a contractual basis.
Investment intermediaries中国机长观后感 are finance companies, mutual funds, and money market mutual funds that provide transactionary rvices.
Chapter 11
3. Explain how the Federal Rerve can influence the federal funds interest rate.
The Federal Rerve cannot directly control fed funds rates. It can and does indirectly influence them by adjusting the level of rerves available to banks in the system. The Fed can increa the amount of money in the financial system by buying curities. when investors ll curities to the Fed, the proceeds are deposited in their banks' accounts at the Federal Rerve. The deposits increa the supply of rerves by lling curities, fed funds rates will increa.
4. Explain why money market interest rates move so cloly together over time.
Becau all of comparing money market curities have very low risk and a short term. They all have deep markets and so are priced competitively. In addition , becau the instruments have so many of the same risk and term characteristics, they are clo substitutes.
5. How are Treasury bills sold? How do competitive and noncompetitive bids differ?
The Fed has t up a direct purcha option that individuals may u to purcha Treasury bills over the Internet. The significant difference between the two methods is that competitive bidders may or may not end up buying curities whereas the noncompetitive bidders are guaranteed to do so.
参军要求Chapter 12
3. What role do restrictive covenants play in bond markets?
The restrictive covenants include rules and restrictions on managers designed to protect the bondholders’ interest. 无可奈何花落去打一日常用语And they usually limit the amount of dividends the firm can pay, and the ability of the firm to issue additional debt.
4. What is a convertible bond? How does the convertibility feature affect the bond's price and interest rate?
Convertible bond is a kind of bond which bondholders can convert into a company's common stock at the agreed price. Result from the convertibility feature ,its price will be r
延迟退休elatively higher and interest rate will be comparatively lower.
5. What types of risks should bondholders be aware of and how do the affect bond prices and yields?
(1) Interest-rate risk. The longer the time until the bond matures, the greater will be the change in price. If the bondholders attempt to ll their bonds after interest rates have rin, they will receive less than they paid.
(2)Default risk. The degree of risk varies widely among different bond issues .Bonds with lower risk and a higher rating have lower interest rates than more risk bonds.
(3) Liquidity risk. Bonds with shorter term and lower face value have lower interest rates.
Chapter 13
3. How do over-the-counter markets differ from organized exchanges?
Organized exchanges :
1) Auction markets with floor specialists.
2) 25% of traders are filled with directly by specialist.
结束英语怎么说3) Remaining trades are filled through SuperDOT.
Over-the-counter markets:
1) Multiple market makers t bid and ask prices.
2) Multiple dealers for any given curity.
4. What are the advantages and disadvantages of Electronic Communications Networks (ECNs) for trading stocks?
Advantages:
箭头英语
1）Transparency: everyone can e unfilled orders.
2）Cost reduction: smaller spreads.
3) Faster execution
4）After-hours trading红枫的养殖方法和注意事项
Disadvantage: they work only for stocks with substantial volume.
5. Why would a crisis in the subprime mortgage market lead to declining prices in the U.S. equity markets?
