Questions from Financial Markets


Q: On March 11, 20XX, the existing or current (spot

On March 11, 20XX, the existing or current (spot) one-year, two-year, three-year, and four-year zero-coupon Treasury security rates were as follows: 1 R 1 = 4.75%, 1 R 2 = 4.95%, 1 R 3 = 5.25%,...

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Q: What events resulted in banks’ shift from the traditional banking model of

What events resulted in banks’ shift from the traditional banking model of originate-and-hold to a model of originate-and-distribute?

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Q: How did the boom in the housing market in the early and

How did the boom in the housing market in the early and mid-2000s exacerbate FIs’ transition away from their role as specialists in risk measurement and management?

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Q: Which has the longest duration: a 30-year, 8

Which has the longest duration: a 30-year, 8 percent yield to maturity, 5 percent coupon bond or a 30-year, 10 percent yield to maturity, 5 percent coupon bond?

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Q: How is duration related to the price elasticity of a fixed income

How is duration related to the price elasticity of a fixed income security? What is the relationship between duration and the price of a fixed-income security?

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Q: Describe the functions performed by Federal Reserve Banks.

Describe the functions performed by Federal Reserve Banks.

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Q: What are the tools used by the Federal Reserve to implement monetary

What are the tools used by the Federal Reserve to implement monetary policy?

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Q: Explain how a decrease in the discount rate affects credit availability and

Explain how a decrease in the discount rate affects credit availability and the money supply.

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Q: Why does the Federal Reserve rarely use the discount rate to implement

Why does the Federal Reserve rarely use the discount rate to implement its monetary policy?

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Q: What changes did the Fed implement to its discount window lending policy

What changes did the Fed implement to its discount window lending policy in the early 2000s? in the late 2000s?

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