Questions from Financial Markets

Q: Under what conditions might investors consider short selling a specific stock?

Under what conditions might investors consider short selling a specific stock?

Q: Describe the roles of market makers.

Describe the roles of market makers.

Q: What are electronic communication networks (ECNs)?

What are electronic communication networks (ECNs)?

Q: Briefly describe the structure and role of the Securities and Exchange Commission

Briefly describe the structure and role of the Securities and Exchange Commission (SEC).

Q: Explain how the Securities and Exchange Commission attempts to prevent violations of

Explain how the Securities and Exchange Commission attempts to prevent violations of SEC regulations.

Q: Use the loanable funds framework to explain how European economic conditions might

Use the loanable funds framework to explain how European economic conditions might affect U.S. interest rates.

Q: Explain how circuit breakers are used to reduce the likelihood of a

Explain how circuit breakers are used to reduce the likelihood of a large stock market crash.

Q: Describe the general characteristics of a futures contract. How does a

Describe the general characteristics of a futures contract. How does a clearinghouse facilitate the trading of financial futures contracts?

Q: Describe the practice of cross hedging and explain when this strategy might

Describe the practice of cross hedging and explain when this strategy might be used.

Q: How might a savings and loan association use Treasury bond futures to

How might a savings and loan association use Treasury bond futures to hedge its fixed-rate mortgage portfolio (assuming that its main source of funds is short-term deposits)? Explain how prepayments o...